Furlough effects on redundancy and holiday entitlement explained during ‘difficult time’

Furlough agreements have had to be introduced for millions of employees in recent months as coronavirus continued to impact the economy. Due to how serious the situation became, Rishi Sunak was forced to radically alter employment laws to keep the country afloat.


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Many workers found themselves in unforeseen circumstances and their employers were likely trying to wrap their heads around the new rules forced upon them.

Because of all this, many workers may have struggled to keep on top of their own specific circumstances but thankfully, plenty of expert guidance was issued to help.

Today on This Morning, further guidance and insight was provided by Amanda Lennon, an employment lawyer and HR expert.

She received a call from Melanie who rang in to ask about her rights concerning furlough and annual leave payments.

Melanie detailed that she had been on furlough since the end of March and her employer had been encouraging her to take her annual leave.

She went on to detail that she may be facing redundancy but still has annual leave remaining and as such, she asked Amanda on where she stood.

Amanda was very concise in her response: “Yes so your employer can ask you to take annual leave during any period of furlough, including during your notice period.

“So, if they do do that though, they have to pay you at 100 percent so you’re full rate, your normal contractual rate not your furlough rate.

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“If you do have any accrued but untaken holiday at the end when your employment comes to an end your entitled to be paid for that too and that would be at 100 percent.”

The issue of redundancy may become more prevalent in the coming months as many people have warned that the extension of the job retention scheme could prove to be too costly.

In mid-May, Rishi Sunak extended the furlough scheme until October.

However, as we move into autumn employers will be asked to contribute to the overall cost of the scheme, which could put a strain on the country’s already struggling businesses.


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From September, employers will be expected to pay 10 percent of wages covered by the furlough scheme, whereas previously it was completely covered by the state.

This will then increase to 20 percent in October.

When announcing these changes, Rishi Sunak had the following comments: “Our top priority has always been to support people, protect jobs and businesses through this crisis.

“The furlough and self-employment schemes have been a lifeline for millions of people and businesses.

“We stood behind Britain’s businesses and workers as we came into this crisis and we stand behind them as we come through the other side.

“Now, as we begin to re-open our country and kickstart our economy, these schemes will adjust to ensure those who are able to work can do so, while remaining amongst the most generous in the world.”

While many have expressed worry over the changes announced some people have been more welcoming. 

Edwin Morgan, the Director of Policy at the Institute of Directors, had the following reaction: “The furlough scheme has played an immense role protecting jobs, and business leaders understand it couldn’t be sustained at the same level forever. This is a much more gradual tapering than many were expecting, reflecting the concerns the IoD has raised. The ability to bring people back part-time is crucial, and we’re delighted the Treasury has taken on board our members’ calls to bring this in as soon as possible.

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