Furloughed scheme workers warned about ‘fire and rehire’ threat as wage help winds up
FURLOUGHED workers have been warned about the risk of "fire and rehire" tactics as the wage help scheme comes to an end.
"Fire and rehire" is when an employer sacks a worker in order to offer them their job back with reduced pay and benefits.
According to the latest government statistics, 2.4million people are still relying on the Coronavirus Jobs Retention Scheme.
Furlough was announced in March 2020, and saw the government pay 80% of wages to a maximum of £2,500 a month.
Employers now have to contribute 10% of wages following changes to the scheme last month.
It was designed to avoid redundancies at firms that were struggling to survive during the pandemic.
Can I be made redundant if I'm on furlough?
EVEN though furlough is designed to keep workers employed, unfortunately it doesn't protect you from being made redundant.
But it doesn't affect your redundancy pay rights if you are let go from your job amid the coronavirus crisis.
Your employer should still carry out a fair redundancy process.
You will be entitled to be consulted on the redundancy lay-off first and to receive a statutory redundancy payment, as long as you've been working somewhere for at least two years.
How much you're entitled to depends on your age and length of service, although this is capped at 20 years. You'll get:
- Half a week’s pay for each full year you were under 22,
- One week’s pay for each full year you were 22 or older, but under 41,
- One and half week’s pay for each full year you were 41 or older.
Sadly, you won't be entitled to a payout if you've been working for your employer for fewer than two years.
There should be a period of collective consultation as well as time for individual ones if your employer wants to make 20 or more employees redundant within 90 days or each other.
You are also entitled to appeal the decision by claiming unfair dismissal within three months of being let go.
If you're made redundant after your company has gone into administration you can claim redundancy pay .
The scheme will come to an end in September, prompting fears that some businesses will opt for "fire and rehire" methods to save money.
It is legal to fire someone before re-employing them under worse terms, but the practice has been criticised for being unethical.
If an employer wants to vary terms and conditions of an employment contact, they have to try and reach agreement to the changes by consulting with the workforce, and any trade unions, first.
If an agreement can't be reached, employers must terminate employees existing contracts by giving notice, and offer to re-engage on the new terms.
The workers are then effectively dismissed, and face the choice of accepting the new, usually less generous terms, or being unemployed.
Kate Hindmarch, an employment lawyer at Langleys Solicitors, said: “Most employees in this situation, particularly in the current economic climate, are likely to accept the new contract, whatever the terms, to avoid unemployment."
Alan Price, chief executive at human resources platform BrightHR, said dismissal and rehiring was a common practice before the pandemic.
But he said there has been a "big increase in the number of employers using this practice since the first lockdown in March 2020".
This is expected to increase when the furlough scheme ends, as businesses have to pick up the bill for workers' wages again.
Price said: "The Covid-19 pandemic has put many businesses in an extremely difficult financial position.
"Firing and rehiring staff on less favourable terms and conditions can often be the only way that jobs that would otherwise have been at risk of redundancy can be saved."
Tim Gofton, an employment lawyer in the retail and hospitality team at Royds Withy King, said "fire and rehire" should always be used as a ";last resort".
This is because workers with more than two years' service have the right to claim unfair dismissal.
For groups of more than 20 workers, businesses must also conduct a consultation.
Kate Hindmarch added: “Ultimately, “fire and rehire” is potentially lawful, but businesses must consider whether it is ethical.
"It is a high-risk strategy which employers should not take on without understanding the risks and potential reputational damage involved.”
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