Furloughed but now told being made redundant

nigreeves99

My daughter is currently furloughed. She has today had a redundancy notice from her employer due to the downturn and long term problems within the Estate agency industry. The timing seems strange as one would expect this decision to be made at the end of the furlough support from the Govt. We are researching her rights etc but i would be interested to hear views why the employer chose to act now rather than at the end of furlough. Thanks.

gary83

she’d continue to accrue holiday whilst on furlough, that would be a cost to the estate agency if they made her redundant at the end of the scheme.

if she’d been there approaching 2 years the redundancy would cost more if she went over the 2 year mark.

sliphi

nigreeves99 said:

My daughter is currently furloughed. She has today had a redundancy notice from her employer due to the downturn and long term problems within the Estate agency industry. The timing seems strange as one would expect this decision to be made at the end of the furlough support from the Govt. We are researching her rights etc but i would be interested to hear views why the employer chose to act now rather than at the end of furlough. Thanks.

Her rights are the same as at any other time.
The employer made her redundant because they either have no further need for the position and/or their business requires to cut costs by losing employee(s) to survive.
Essentially, the only question to consider is whether or not she was selected for redundancy fairly compared to others who have not been made redundant.

Thrugelmir

Companies will already be making plans for the future. Headcount reduction will just one of many considerations. There'll be a cost to the employer in terminating her employment. 
Never easy to make people redundant. Perhaps the management want to get the bad news out of the way now. Rather than cause further disruption to the organisation at a later date. Then they can focus on restructuring the business operationally. 

yksi

I think it's the business type that has caused this. It might seem strange to you, but estate agencies are predicting massive property downturns taking years to recover, well past the end of the lockdown. It's very understandable that they can't see the need to keep all of their staff. Sorry for your bad news.

sliphi

yksi said:

I think it's the business type that has caused this. It might seem strange to you, but estate agencies are predicting massive property downturns taking years to recover, well past the end of the lockdown. It's very understandable that they can't see the need to keep all of their staff. Sorry for your bad news.

Really? Source? Or just scaremongering?

Here is what Which? reported earlier this month:

Will coronavirus affect house prices?
It’s too early to say exactly what impact the outbreak will have on the property market, but this is likely to mirror the rest of the economy.

In the short-term, house price growth will stagnate as there will be fewer transactions going through.

But as we saw with Brexit, the UK property market is very robust, so it’s highly unlikely that prices will crash in the coming months.

Knight Frank forecasts that UK prices will fall by 3% this year, but then bounce back by 5% in 2021, in line with its predictions around the economy as a whole shrinking this year.

Richard Donnell from Zoopla, says: ‘We do not expect any immediate impact on prices. Beyond the next few months, the outlook largely depends on how the government’s package of support for businesses and households reduces the scale of the economic impact.

‘The timing of any rebound in housing market activity depends on when the new restrictions are lifted and to what extent households and businesses are able to return to a normal way of life.’

Source: https://www.which.co.uk/news/2020/04/how-will-the-coronavirus-affect-house-prices/

yksi

Newly released research and analysis from lending platform, Sourced Capital, reveals that the UK property market could potentially see a double-digit rate of property value decline, with the market taking over five years to recover.

The firm analysed market data from previous recessions to look at the potential decline caused to the UK property market due to the economic impact of the current COVID-19 pandemic, should COVID-19 bring about another recession.

source: https://www.propertyreporter.co.uk/finance/atest-data-predicts-double-digit-property-value-decline-due-to-crisis.html

Clearly you and I don't agree, and it is entirely possible there will be no real decline, but that's not really relevant here. What is relevant is that many agents are in deep, deep trouble right now without any business income, and that some of them believe the negative predictions for the market and are acting accordingly. I know of several in my area alone which have opted to let staff go rather than furlough them as they see no real prospect of enough work for them even after lockdown.

Thrugelmir

sliphi said:

yksi said:

I think it's the business type that has caused this. It might seem strange to you, but estate agencies are predicting massive property downturns taking years to recover, well past the end of the lockdown. It's very understandable that they can't see the need to keep all of their staff. Sorry for your bad news.

Really? Source? Or just scaremongering?

Here is what Which? reported earlier this month:

Will coronavirus affect house prices?
It’s too early to say exactly what impact the outbreak will have on the property market, but this is likely to mirror the rest of the economy.

In the short-term, house price growth will stagnate as there will be fewer transactions going through.

But as we saw with Brexit, the UK property market is very robust, so it’s highly unlikely that prices will crash in the coming months.

Knight Frank forecasts that UK prices will fall by 3% this year, but then bounce back by 5% in 2021, in line with its predictions around the economy as a whole shrinking this year.

Richard Donnell from Zoopla, says: ‘We do not expect any immediate impact on prices. Beyond the next few months, the outlook largely depends on how the government’s package of support for businesses and households reduces the scale of the economic impact.

‘The timing of any rebound in housing market activity depends on when the new restrictions are lifted and to what extent households and businesses are able to return to a normal way of life.’

Source: https://www.which.co.uk/news/2020/04/how-will-the-coronavirus-affect-house-prices/

The reality is very basic. With no house sales in the pipeline. There's going to be a barren patch ahead with little to no commission generated. Like any business cashflow is king. With no cash the business is going under unless there's amputation. Furloughing and business loans are no long term solution just a temporary bandage.