Legal for employer to reclaim furlough from me if HMRC decide they shouldn't have used furlough?!

philmusic

Hi there, my employer has sent out a new letter to all staff about putting us all on the new extended Furlough Scheme. However, this new letter wants us to agree to some new terms and conditions... the most interesting and concerning being the following: "If, for any reason, HMRC decides not to pay us (or decides to reclaim) any monies in connection with your salary, we are entitled to not to pay it to, or to reclaim it from, you (including by making deductions from future salary payments to you), and no further payments shall be due." So, have I understood this correctly? Basically if they have messed up, they can fleece all the staff for their mistake and claim the money back from us and make us all homeless!!?? Is this legal?? We had the letter today and have until Friday to agree to the terms. If we don't agree we will be put on unpaid leave! Looking forward to some helpful advice, Thanks.

philmusic

I have found where my employer must have got the legal wording from. It is the only google result when I google the wording. It is from a solicitor firm as a 'FREE Furlough agreement document download'!! It also says in small print underneath... "You use this document at your own risk and are responsible for checking it complies with applicable laws and guidance, and with any subsequent legislation or guidance under the Coronavirus Job Retention Scheme". So it may not be legal anyway? Hmm! Can anyone help me with this? I only work part time there, and the rest of my time is self employed which isn't 50% so I get no gov help for that, and my self employed work had to stop as soon as the pandemic started, so the idea that my part time employer could claim the furlough money back from me is very worrying!

MattMattMattUK

Yes it would be legal, if they add that clause to the furlough agreement and you agree to it as you are agreeing to a variation of your contract. You will find that a lot of furlough agreements contain it and I would be very surprised if you get it removed. 

The reality of it happening however is almost zero, so long as you are not government funded which is the major exclusion for CJRS and you were employed on the deadline dates then it is highly unlikely (to the point of almost certainly not happening) that HMRC would refused to pay out, or reclaim funds issued under CJRS.

Your choice is to be paid, with a incredibly small risk of the money being reclaimed, or to not be paid at all. If you choose the latter you have no money, if you choose the former then there is probably a 99.99999% chance you will get paid at the furlough rate, in the worse case scenario you have no money, which is no worse off than refusing to be furloughed in the first place. 

philmusic

Thanks MattMattMattUK, yup I know I don't really have a choice, but just wondered about the legality of it and if it would stand up in court if the worst were to happen. Wife and kids, and the only wage earner, so at the end of the day i need the money!

unholyangel

Just to add, if your contract states a minimum number of hours you need to work then your employer would need to pay you for those, unless you agreed furlough. They can't just unilaterally decide to not pay you - thats what the contract is. You agree to be available/at their disposal for x hours and they agree to pay you x wage. If you're available but the hours aren't, that's their breach. If the hours are available but you aren't, that's your breach. 

That being said, if your employer didn't pay you then your option would basically be to take them to a tribunal for unpaid wages. Which isn't going to help you in the meantime to pay bills etc. 

Galloglass

What is the alternative offer? Is it redundancy? You might ask out of interest even though you have decided to accept an offer you can't refuse.

philmusic

Galloglass, in the letter it says this is an alternative to unpaid leave. No choice really!!

theoretica

Does your contract allow your employer to put you on unpaid leave?

philmusic

Oh, I was so focused on point 7 of my letter from my employer I forgot to fully read point 8 which says... "when your furlough leave ends, in the event that there is still any disruption in provision of work and accordingly a diminution in the requirements of the business for work of a kind for which you are employed, or any other occurrence affecting the normal working of the business in relation to the work you are employed to do, we must reserve the right not to provide you with work without any pay except for statutory guarantee payments." So is that their way of getting out of paying us anything and also meaning they don't have to pay us redundancy as on paper we are still employees?!

philmusic

Theoretica, my employment contract says nothing about unpaid leave... I have just checked. They are wanting us to email our agreement to this new letter which has the above point 8 in it about unpaid leave!

Jeremy535897

See https://www.gov.uk/lay-offs-short-timeworking/guarantee-pay

Statutory redundancy is calculated on the last 12 weeks of normal pay.