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Redundancy whilst furloughed

Sarah

I work for a medium sized company in manufacturing and unfortunately, our products are not considered essential. We had to shut the factory from the first day of the lockdown and furloughed factory staff from that day whilst office staff worked from home until the end of March and furloughed from 1st April. Out of almost 350 employees, only 16 are non furloughed. The factory shut was initially for 3 weeks ending after the Easter Monday bank holiday. However, we have had to extend this. It has now come to a point where unpleasant decisions will have to be considered ie redundancies.

My research so far is telling me that employees can be made redundant whilst on furlough. I wondered if anyone has any thoughts on this, especially the legality and ethical aspects.

Any feedback would be very much appreciated

Many thanks

Parents
  • It would be better for your cash flow to leave them on furlough and claim back their furlough pay, provided your business can make it through to May when the grants should start being paid - unless you are topping up to 100%. If you are topping up, I would go back to the workforce and ask them to agree to their pay dropping to 80% or £2,500 per month in order to save jobs.
  • in reply to Elizabeth Divver
    Hi Elizabeth, thank you so much for your prompt feedback...very much appreciated.
    We have 2 pay categories (weeklies & salaried staff). Weeklies - whose hourly rate is very close to the NLW - are being topped up to 100%. Salaried staff have been asked to take a 10% reduction which all have agreed to. I believe the reason behind the contemplation is cash flow. Our customers are in the same boat i.e. they sell non essential goods. So if they are not buying because they can't sell we basically can't sell either :(
  • in reply to Sarah
    If the staff, weeklies and salaried, know that the alternative is people losing their jobs, they may well agree to dropping to the lower of 80% or £2,500 per month.
  • in reply to Sarah
    Of course there is no obligation legally to top up salaries to 100% even if this means they are paid below the NMW

    The cash flow implications of paying redundancy pay and notice pay in one go would probably be significant I would assume
  • in reply to Keith
    There is some debate over whether an employer could pay notice pay from furlough (as long as topping up to 100%)
    We have a few clients who have gone early with redundancies because they know they will be quiet for months after lockdown and will have other priorities at that time.
    As Sarah said difficult legal and moral issues to be addressed
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  • in reply to Keith
    There is some debate over whether an employer could pay notice pay from furlough (as long as topping up to 100%)
    We have a few clients who have gone early with redundancies because they know they will be quiet for months after lockdown and will have other priorities at that time.
    As Sarah said difficult legal and moral issues to be addressed
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