Job retention/redundancy - is my understanding correct? 25 May 2020 at 11:12AM edited 25 May 2020 at 11:12AM in Redundancy & Redundancy Planning 3 replies 391 views

jj2020

Hello there,
My company has recently started to discuss that it may have to consider making some cuts and I just wanted to ensure I have understood what the process allows having never been involved in it before.

1. If the company advises of redundancy on say June 1st, they can use the job retention scheme money to pay for any notice period at 80% and top up the additional 20% required? Is this ethically and morally fair?
2. However, they cannot use the job retention scheme money to make the necessary redundancy payment?
3. Therefore one reason a company would make somebody redundant now, as opposed to at the end of the job retention scheme would be to avoid having to pay 100% of the notice period?
4. Anybody who was made redundant now, would be unable to be rehired and put back on furlough to claim the job retention scheme money?
   

Thank you so much for any help
Jon

sharpe106

Sorry to hear that you may be made redundant.

 1. There is nothing really in the rules that say they can’t, it something the government really need to clear up. As you can claim for employers pay and notice period is still pay so they probably can.  Is it ethical and morally fair no but I am sure plenty of companies will if they can.

2. That is the one part the government has been clear on they can’t use the scheme for redundancy pay.

3. That is one of the reasons but probably not the only reason. Even not counting that the scheme is still not free for employers, still a cost, also employees might get more employment rights (take them over the 2 years’ service) if they wait. 

4. Government ministers have stated that a company can rehire people for furlough, but it is not the spirit of the scheme and again neither is it free for companies, the person becomes an employee again.

Grumpy_chap

Thank you both - very clearly asked and very clearly answered

jj2020

Thank you very much for answering so quickly. This is very helpful.