UK furlough, redundancy shadow... how to hope for the best and plan for the worst?

lucaz88

Hi guys,

As I’m actually furloughed and things are getting worse at my current workplace (financial crisis), managers sent us messages of possible redundancies and there’s a high chance that I’ll be one of them once the furlough scheme is over (currently Oct 2020). I’m actively looking for a job but should consider this as my “worst case scenario” and need to plan my finances accordingly. I’ve never been made redundant nor claimed benefits. As I’ve worked a bit in Asia (Sept 2018-May 2019) and other places in the world, I’m a bit lost in terms of work rights in the UK, therefore my “basic” yet essential questions where I need to find answers asap.

1. Compulsory VS voluntary redundancy

The company is in financial crisis. I understand the difference between these two, but don’t clearly see which one “weighs more” in my favour? Do they both entitle to redundancy pay/other type of benefits?

2. Benefits

I think they both qualify as “dismissal”, therefore open to JobSeeker Allowance / Universal credit rights, isn’t it? I’ve been paying NI since 2016 (excepting the 09/2018-05/2019 period where I worked in Asia for a local company).

3. Redundancy pay

I’ve started working for this company in May 2019, therefore I have less that 2 years of working experience, does that disqualify me for redundancy pay? To what else could I be entitled to?

4. Holiday pay

I have around 20 holidays that I’ve taken, it’s likely I will stay furloughed until its end, can my employer force me to take them now? Can it refuse to pay me my legitimate holidays?

I thank you in advance if you can help me finding answers or in pointing me into the right direction.

poppy12345

lucaz88 said:

2. Benefits

I think they both qualify as “dismissal”, therefore open to JobSeeker Allowance / Universal credit rights, isn’t it? I’ve been paying NI since 2016 (excepting the 09/2018-05/2019 period where I worked in Asia for a local company).

This could be an issue for New style JSA because you need to have paid the correct amount of NI contributions in tax years April to March 2017/18 and April to March 2018/19. You may fail on the 2018/19 part.

Universal Credit is means tested so claiming this will depend on your circumstances. Savings/capital of £16,000 will exclude you. If you live with a partner then you claim as a couple.

A claim for UC will end any tax credits you may already be claiming. Use a benefits calculator to check entitlement.

If you claim both of the above the JSA will be deducted in full from your UC entitlement.

bradders1983

Answer to 4 is yes, employer can force you to take holiday provided they give double the time in notice.

Jeremy535897

For points 1 and 3, you won't be entitled to any statutory redundancy. Your contract of employment might say otherwise, so check it, but it's unlikely.

For point 2, when any notice has expired, you may be able to apply for new style JSA: https://www.gov.uk/guidance/new-style-jobseekers-allowance . Depending on your income and savings, you may be able to apply for universal credit. New style JSA reduces universal credit £1 for £1. See https://www.understandinguniversalcredit.gov.uk/new-to-universal-credit/ In the unlikely event that you can claim tax credits, be aware that starting a claim for universal credit ends tax credit claims permanently.

You will be entitled to at least one week's statutory notice (more if your contract of employment says so). Statutory notice is paid at full rate if your furlough rate is lower.Your employer can give you notice while you are on furlough, and can ask you to take unused holiday during furlough or notice (point 4), with the requisite notice of twice the length of the holiday period (or whatever your contract of employment says). Holidays are usually paid at full rate rather than furlough rate.

lucaz88

I've realised I didn't thank you guys for your answer, they were helpful.

Thank you for your advices !

Take care and stay safe.

Luke.