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Redundancy guarantee for furloughed workers

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New rules will ensure that furloughed employees are not ‘short-changed’ if they are made redundant…

The government has introduced new rules that will protect furloughed workers in the event of redundancy.

The changes, introduced on 30 July 2020, will see employees receiving statutory notice pay calculated using their normal wages, not their furloughed rates of pay.

In the case of any future unfair dismissal claims, potential settlement would also be based on their pre-Covid wages, not the furlough rate they have been receiving.

Business secretary Alok Sharma said: “New laws coming into force will ensure furloughed workers are not short-changed if they are ever made redundant – providing some reassurance for workers and their families during this challenging time.”

The announcement follows on from the Job Retention Bonus plan, which was announced in the Mini Budget in July. The scheme has been designed to help stop mass redundancies as the Coronavirus Job Retention Scheme (JRS) winds down. It could cost the government as much as £9bn.

The plan will see each company paid £1,000 for each person that returns to work from furlough.

The bonus will be paid for staff who return to work between November and January – and who are paid at least £520 per month.

Employers encouraged to take on young staff

Also announced by Chancellor Rishi Sunak in the Mini Budget was a £2bn ‘kickstart scheme’ aimed at creating jobs for young people – dubbed the ‘new lost generation’ in the wake of the coronavirus pandemic.

The scheme is part of an emergency package designed to stop mass unemployment as the UK economy is hit by the effects of lockdown.

Young people aged 16-24, on Universal Credit and at risk of long-term unemployment, will receive six-month work placements funded by the government.

These kickstarter jobs will cover 25 hours’ work each week at the National Minimum Wage (that is, £4.55 for those under 18, £6.45 for young people aged 18 to 20, and £8.20 for the 21-24-year-olds). These payments can be topped up by employers who must offer training and support the young people in finding permanent employment to qualify.

Employers can apply for the scheme, which covers Wales, Scotland and England now, with jobs expected to start in the autumn. The scheme will run until December 2021, with the possibility of an extension. The government has pledged funding for a similar scheme for Northern Ireland.

The scheme could provide hundreds of thousands of jobs as no limit has been placed on numbers.

Apprentices and trainees

The government has also devised a scheme to increase apprenticeships, with employers being paid £2,000 for every apprentice they take on (the sum drops to £1,500 if the apprentice is aged 25 or over).

It has also promised to create 30,000 traineeship opportunities in England for young people aged 16 to 24. These are not paid positions, but instead offer unpaid work experience along with lessons in maths, English, and CV writing. They last from six weeks to six months and companies in England will be given £1,000 for each new work experience place they offer. A £21m fund will offer similar schemes for Northern Ireland, Wales, and Scotland.

Companies are required to offer the young people an interview for a job or apprenticeship if available at the end of their traineeship.

If you would like to discuss this subject further and find out how we could help you navigate these new government schemes, please contact Cecily Lalloo at Embrace HR Limited.

T: 07767 308717 or contact us here.

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Based in Aylesbury, Buckinghamshire, Embrace HR Limited supports business owners who do not have their own HR department or those that do but need help from time to time. We also work across the Home Counties of Oxfordshire, Bedfordshire and Hertfordshire, and also SMEs based in London.