Calculation of Notice Pay on Furlough

bobm180

FAO Martin Lewis,

One unclear unresolved issue with regard to Furlough Leave is in relation to the Calculation of Notice Pay, in respect of potential Redundancies whilst on Furlough.

I am 59 years old with over 12 years permament full-time service with my employer & live in Scotland. As far as I am aware there is no legally binding rule that states anemployer must calculate Notice Pay for Furloughed employees, based on salary received immediately before notice was served (i.e. up to 80% of normal pay).

Current Legal Orthadox approach, dependant on Notice Rights for each employee contract generally advises that Notice Pay would be paid at the rate of pay immediately prior to notice, as per normal Redundancy procedures under the Employment Rights Act 1996.

However, as the Job Retention Scheme was originally set up in order to help employers protect jobs, whilst recognising redundancies may occur, the Employment Rights Act 1996 has never been reviewed or updated to include any definitive guidance on Notice Pay in these circumstances.

As Furlough pay is paid by the government (not the employer) & the employer is allowed to choose whether or not offer to top up the minimum 20% shortfall, a potential Tribunal it could deem it counterintuitive to “get way” with paying less than normal notice pay during a normal notice period because an employee was willing to forego part of their normal salary in an attempt to help their employer remain solvent & save their jobs.

With the above in mind, it appears from an article written by Daniel Barnett (Barrister, Outer Temple Chambers) that any Tribunal would be totally within their rights to argue to ensure that employees receive 100% of their Notice Pay, even if furloughed- please refer to the attached.

As my employer is currently over half-way through a Collective Consultation with a view to redundancies, I would be ever so grateful for your urgent advice & comments on this matter.

Thanks

Bob Marshall

Jeremy535897

For those cautious of opening the above, a Google search finds the item here (not a secure site):
http://emplawservices.co.uk/wp-content/uploads/2020/04/Notice-Pay-when-on-Furlough.pdf

I don't think I can add anything to this erudite analysis. (I have mentioned using the 12 week rule on another thread.) The problem is that the legislation never contemplated wholesale reductions in wages.