Is this legal please?

bradders1983

As an aside, given its a small local firm its probably not a great idea for the OP to have whacked the letter on here.

7Phil

bradders1983 said:

As an aside, given its a small local firm its probably not a great idea for the OP to have whacked the letter on here.

I agree. The OP should have snipped the top and bottom of the letter so that only the content is shown without any business detail.
If the employer discovers this post and identifies the staff member they can take action against the OP.

poppy12345

7Phil said:

 I ridiculed the poster for their, frankly rude, assumption.

If you're referring to me, i wasn't being rude, i was stating a fact. I won't reply any further to your comments and i wish you a good evening

7Phil

It is not a fact. You got it wrong.
And I will continue to offer support to all OPs who I feel receive unfair responses from anyone in this forum which is dedicated to help.

Jeremy535897

There is no date on the letter but it must be after 20 April 2020.  I am not sure you can give an employee a wage rise on 1 April 2020 and then withdraw it retrospectively, even if they were furloughed, unless there was a clause in the furlough agreement or other change in terms that allows them to recover any payments not reimbursed under CJRS. 

bradders1983

Jeremy535897 said:

There is no date on the letter but it must be after 20 April 2020.  I am not sure you can give an employee a wage rise on 1 April 2020 and then withdraw it retrospectively, even if they were furloughed, unless there was a clause in the furlough agreement or other change in terms that allows them to recover any payments not reimbursed under CJRS. 

Isnt the furlough calculation based on salaries BEFORE the 1st April 2020?

Once the OP goes back to work they will get the new NMW. This is clearly a case of the enployer misunderstanding the furlough rules which, given the rate it was put into place and rushed out, is understandable.

Jeremy535897

bradders1983 said:

Jeremy535897 said:

There is no date on the letter but it must be after 20 April 2020.  I am not sure you can give an employee a wage rise on 1 April 2020 and then withdraw it retrospectively, even if they were furloughed, unless there was a clause in the furlough agreement or other change in terms that allows them to recover any payments not reimbursed under CJRS. 

Isnt the furlough calculation based on salaries BEFORE the 1st April 2020?

Once the OP goes back to work they will get the new NMW. This is clearly a case of the enployer misunderstanding the furlough rules which, given the rate it was put into place and rushed out, is understandable.

Of course it is, but you are falling into the trap of assuming that an employer automatically has to pay only the reference salary when furloughing someone. They have to pay at least that amount to qualify for CJRS. What this employer did was give its employees a rise from 1 April 2020. I assume that was because of NMW.  No doubt it then entered into a furlough agreement to pay 80% of the (increased) wage, based on the misunderstanding that current wage, not pre 20 March wage, was the basis for the CJRS. If it then discovers it won't be able to recover the increase under CJRS, it says to the employees, sorry we are reducing your pay from today to 80% of your old wage because we can't recover the increase under CJRS. I know the workers (or at least some) are furloughed so not working, but that doesn't change the fundamental rule that you can't backdate a reduction in an employee's pay. If you came and worked for me for a month, expecting £4,000 per your contract of employment, and at the end of the month I said to you that I was changing it to £2,000, and that was all I was going to pay you, I doubt you'd be so sanguine about it.

John_

Galloglass said:

It's a bit stiff but OK to do.

Needs a bit more explaining. If the employer is paying less than NMW, then HMRC will take them to task as will ACAS. There is no indication in the letter that they will pay less than NMW. 

If they are, your employer should refer to this
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/877796/nmw-covid-19.pdf

That makes no sense. Minimum wage refers to pay for hours worked. If someone is not working then they have no legal,right to the minimum wage.

7Phil

I am running with some assumptions here - but I need to because the details aren't available to be clear.
My guess is the employer has furloughed the NMW worker in March. In their April pay they have increased the NMW to the new 2020 NMW rate and then based the 80% on the new rate.

They now find that the new rate should not have been used and they have effectively overpaid the worker. They can choose to claw that money back. Personally I think it's harsh as the error was made by the employer (easy error to make given the lack of clear guidance at the time) however the employer has decided to do that.

If the employer gave the employee a promise of a pay rise from 1 April, then sure - they should stay true to their word. But more likely it was just an automatic adjustment made by the payroll staff based on the workers being paid NMW.

The key line in all this is "following discussions with HMRC and our accountants". An accountant will always say it's bad business sense to give away money if we don't need to. That's exactly where the decision to claw back has come from.

Jeremy535897

You may be right that it is an error by omission rather than commission, but I still think they are on very dodgy ground. The employees should have to agree to it as otherwise the repayment could be an unlawful deduction from wages. It may also be the case that some workers are still working, and they won't be able to take the increase away from them if that would breach NMW, which then looks wrong if it creates differential pay scales for no reason other than furlough.