The job retention scheme is winding up this Thursday, and workers will either be going back full-time, part-time or may be made redundant by their employer
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Furlough, also known as the job retention scheme, is a government support system for businesses. It means firms could get up to 80% of staff wages to help them stay afloat during the pandemic.
It has been slowly wound down from July, with the level of support from the government being tapered off from that date.
The government used to contribute 80% of pay, up to a cap of £2,500 a month, for hours not worked by furloughed staff. This then fell to 70%, up to £2,187.50, from July 1.
The support from the government then dropped again on August 1 to its current level of 60% contribution for hours not working, capped at £1,875.
Employers pay out the remaining 20% of furloughed income, plus pension and National Insurance contributions, again capped at £2,500.
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The changes mean workers can still get 80% of their pay while on furlough – it’s just the amount contributed by the government that has been reduced.
Employers have also always been able to top up wages to the 100% mark – but they don’t have to do this.
Will the furlough scheme be extended?
So far, the government has ruled out extending the support, saying it was only designed to be a temporary measure.
Furlough was first announced by Chancellor Rishi Sunak in March 2020 for an initial three month period – due to end in May 2020.
The end date has been pushed back five times since, but this is the final one.
What happens when furlough ends?
There are three options, according to the government.
Bosses must decide to either:
- Bring employees back to work on their agreed terms and conditions
- Terminate their employment (normal redundancy rules apply)
- Agree with employees any changes to terms and conditions of employment
What rights you have and how you should be treated if your job is at risk largely depends on your length of service and how many people in your company are being made redundant.
Pam Loch, solicitor and managing director at Loch Solicitors, says you have greater protection and rights if you’ve worked at your company for more than two years.
Speaking to The Mirror in August, Loch said: “You are then entitled to a statutory redundancy payment .
“Statutory redundancy payments are calculated using a formula which takes into account your age, length of service and gross weekly pay.
“There is a calculator you can use to work it out on the Gov.uk website.”
After more than two years’ service you are also protected from being unfairly dismissed, in line with the Employment Rights Act 1996.
This means that an employer must make sure there is a genuine reason for making you redundant and they must go through a fair and reasonable process.
We’ve got a guide here on what to do if you’re being made redundant .