Flexi furlough agreement and pay issues

FuzzyDuck1

Hi I’m hoping someone can advise. March 2020 my brother signed (electronic signature which I believe is ok) to agree to furlough or flexi time working. The letter stated from 1st April 2020 to 31st May 2020 and any extension or curtailing would be made in writing. He hasn’t received any further agreement or notification since this initial letter in March 2020. My brother got called back into work early May and has been lucky to not have his hours affected until January 2021 where he was given 5 minutes notice that he was being furloughed for the afternoon. The company argue that they are covered by the initial letter back in March covering 1st April to 31st May to furlough anyone that agreed to be placed on furlough/flexi until the government stop the furlough scheme. Is this correct? We realise that he can be claimed for but without an agreement after 31st May?

From when he returned to work early May he’s had issues with any month the company has taken furlough for when he’s taken holiday leave. The reason is that every time an employee is placed on the furlough scheme through payroll the employer reverts to hourly pay for the purpose of calculation to the government rather than his monthly salary minus the 20% for the days or hours he took for holiday. I believe this is how they should be doing it to follow their guidelines but should any other wages for that month reflect what he’d usually pick up only minus the 20% for the hours not worked or holiday days?They have also stated that anyone that has been placed on the furlough scheme will automatically be placed on 80% of their pay from their cut off date (20th of each month) to the end of that month and adjust pay in the following months payroll. Meaning he’s not been paid in full for the hours he’s actually worked. 

So in short 
1) should the company have provided a new agreement from 1st June last year or can they use that agreement until the government ends this furlough scheme sometime this year ? 

2) is the employer allowed to deduct 20% of pay and put it as an “end of month supplement” on his wage slip until the end of the month when actual hours worked are known (so they can only claim furlough for hours he didn’t work through HMRC) and then pay back the 20% deduction the following month? Please note the employer did inform its employees that this is how they would do things but as my brother didn’t think he was subject to flexi furlough after 31st May and has worked full time since he didn’t think this applied to him. 

3) as he was subjected to half day furlough at 5 mins notice (informed via an internal log system) for a half day in January this year, are they able to claim 1st January bank holiday as furlough when he doesn’t contractually work bank holidays so would’ve been paid in full at any other time if he hadn’t been flexi furloughed for half day?

We understand that the government have given employers a way to calculate the wages but it’s meant he’s not been paid a days salary that he would usually. Usually receives 1/12th of his annual salary. Would this constitute as an unlawful deductions from earnings?

Any advice gratefully received. Thank you 

Marcon

FuzzyDuck1 said:

Hi I’m hoping someone can advise. March 2020 my brother signed (electronic signature which I believe is ok) to agree to furlough or flexi time working. The letter stated from 1st April 2020 to 31st May 2020 and any extension or curtailing would be made in writing. He hasn’t received any further agreement or notification since this initial letter in March 2020. My brother got called back into work early May and has been lucky to not have his hours affected until January 2021 where he was given 5 minutes notice that he was being furloughed for the afternoon. The company argue that they are covered by the initial letter back in March covering 1st April to 31st May to furlough anyone that agreed to be placed on furlough/flexi until the government stop the furlough scheme. Is this correct? We realise that he can be claimed for but without an agreement after 31st May?

From when he returned to work early May he’s had issues with any month the company has taken furlough for when he’s taken holiday leave. The reason is that every time an employee is placed on the furlough scheme through payroll the employer reverts to hourly pay for the purpose of calculation to the government rather than his monthly salary minus the 20% for the days or hours he took for holiday. I believe this is how they should be doing it to follow their guidelines but should any other wages for that month reflect what he’d usually pick up only minus the 20% for the hours not worked or holiday days?They have also stated that anyone that has been placed on the furlough scheme will automatically be placed on 80% of their pay from their cut off date (20th of each month) to the end of that month and adjust pay in the following months payroll. Meaning he’s not been paid in full for the hours he’s actually worked. 

So in short 
1) should the company have provided a new agreement from 1st June last year or can they use that agreement until the government ends this furlough scheme sometime this year ? 

2) is the employer allowed to deduct 20% of pay and put it as an “end of month supplement” on his wage slip until the end of the month when actual hours worked are known (so they can only claim furlough for hours he didn’t work through HMRC) and then pay back the 20% deduction the following month? Please note the employer did inform its employees that this is how they would do things but as my brother didn’t think he was subject to flexi furlough after 31st May and has worked full time since he didn’t think this applied to him. 

3) as he was subjected to half day furlough at 5 mins notice (informed via an internal log system) for a half day in January this year, are they able to claim 1st January bank holiday as furlough when he doesn’t contractually work bank holidays so would’ve been paid in full at any other time if he hadn’t been flexi furloughed for half day?

We understand that the government have given employers a way to calculate the wages but it’s meant he’s not been paid a days salary that he would usually. Usually receives 1/12th of his annual salary. Would this constitute as an unlawful deductions from earnings?

Any advice gratefully received. Thank you 

This seems to be a whole mass (and mess!) of questions and events from what sounds like a befuddled employer and an even more befuddled employee. Probably the best bet is for your brother to give ACAS's free helpline a call. 

A deduction from wages needs to be just that: a deduction, not a reduction. He may have been underpaid, but that's not the same thing, even if it looks quite amazingly like it! It's an important distinction, because he needs to be sure he is pursuing the right remedy - i.e. payment of any underpaid wages.

Savvy_Sue

Having a cut off point and adjusting the following month is not in itself unlawful. I cannot comment on the complexities above ... 

FuzzyDuck1

Marcon said:

FuzzyDuck1 said:

Hi I’m hoping someone can advise. March 2020 my brother signed (electronic signature which I believe is ok) to agree to furlough or flexi time working. The letter stated from 1st April 2020 to 31st May 2020 and any extension or curtailing would be made in writing. He hasn’t received any further agreement or notification since this initial letter in March 2020. My brother got called back into work early May and has been lucky to not have his hours affected until January 2021 where he was given 5 minutes notice that he was being furloughed for the afternoon. The company argue that they are covered by the initial letter back in March covering 1st April to 31st May to furlough anyone that agreed to be placed on furlough/flexi until the government stop the furlough scheme. Is this correct? We realise that he can be claimed for but without an agreement after 31st May?

From when he returned to work early May he’s had issues with any month the company has taken furlough for when he’s taken holiday leave. The reason is that every time an employee is placed on the furlough scheme through payroll the employer reverts to hourly pay for the purpose of calculation to the government rather than his monthly salary minus the 20% for the days or hours he took for holiday. I believe this is how they should be doing it to follow their guidelines but should any other wages for that month reflect what he’d usually pick up only minus the 20% for the hours not worked or holiday days?They have also stated that anyone that has been placed on the furlough scheme will automatically be placed on 80% of their pay from their cut off date (20th of each month) to the end of that month and adjust pay in the following months payroll. Meaning he’s not been paid in full for the hours he’s actually worked. 

So in short 
1) should the company have provided a new agreement from 1st June last year or can they use that agreement until the government ends this furlough scheme sometime this year ? 

2) is the employer allowed to deduct 20% of pay and put it as an “end of month supplement” on his wage slip until the end of the month when actual hours worked are known (so they can only claim furlough for hours he didn’t work through HMRC) and then pay back the 20% deduction the following month? Please note the employer did inform its employees that this is how they would do things but as my brother didn’t think he was subject to flexi furlough after 31st May and has worked full time since he didn’t think this applied to him. 

3) as he was subjected to half day furlough at 5 mins notice (informed via an internal log system) for a half day in January this year, are they able to claim 1st January bank holiday as furlough when he doesn’t contractually work bank holidays so would’ve been paid in full at any other time if he hadn’t been flexi furloughed for half day?

We understand that the government have given employers a way to calculate the wages but it’s meant he’s not been paid a days salary that he would usually. Usually receives 1/12th of his annual salary. Would this constitute as an unlawful deductions from earnings?

Any advice gratefully received. Thank you 

This seems to be a whole mass (and mess!) of questions and events from what sounds like a befuddled employer and an even more befuddled employee. Probably the best bet is for your brother to give ACAS's free helpline a call. 

A deduction from wages needs to be just that: a deduction, not a reduction. He may have been underpaid, but that's not the same thing, even if it looks quite amazingly like it! It's an important distinction, because he needs to be sure he is pursuing the right remedy - i.e. payment of any underpaid wages.

Hi thank you. I understand the point you are making. I think the problem is that after 31st May there was no agreement between the employer and my brother as that agreement ended. They have furloughed him without agreement (or discussion) and when payroll tried to explain his January pay in detail, they reverted him to an hourly rate for HMRC purposes in working out his furlough hour rate which was an hourly figure of £1.10 per hour less than his annual salary. I hope that makes sense? My brother only wants what he usually gets paid plus a new agreement from the company if they wish to flexi time him but they are adamant that the letter he signed to cover 1st April to 31st May allows them to place him on flexi furlough until the end of the government’s scheme. Nowhere within this agreement did it state that. 

ThePeopleDirector

Hi, to briefly answer your questions:

1.  Yes there should of been a new Furlough Agreement, unless the original allowed for an extension.  Also if now on Part Furlough, this would need a new agreement as Part Furlough did not exist back in March 2020 when furlough mostly began.

2.  If the employer knows the salary but their systems close in order to allow payroll processing then they should estimate and rectify the following month.  They are in fact making life harder for themselves as they will have to tell HMRC if they have over claimed Furlough pay for a previous month.

3.  Question 3 is not very clear.  Your brother was furloughed on 1st January, this is only relevant if they treat the day as a public holiday.  If they do then they should of topped up his wages to 100%, and whilst not really ethical, they can claim it back as long as he was not furloughed just for 1 day to take advantage of the PH.

Lastly HMRC use a different method to calculate pay that most companies.  A lot of companies use 12 equal pay packets and then for holiday / sick days use 1/260th of annual pay.  HMRC as far as Furlough claims are concerned use the number of working days in the month so in Feb there are only 20 working days so the daily rate is higher where as in another month there are 23 days which makes a days pay less.

Andy