Furloughed workers urged to know legal rights amid rule changes

Legal experts are encouraging furloughed workers to scrutinise their rights to redundancy and holiday pay, as the scheme is set for its biggest change since being reintroduced in November 2020.

From Thursday 1 July 2021, companies will need to contribute a minimum of 10 per cent towards the pay of furloughed staff, with the Government topping up the remaining 70 per cent.

In August 2021, company payments will increase to 20 per cent, with the Government paying 60 per cent.

According to employment law expert and partner at Shakespeare Martineau, 'Michael Hibbs ', there are a number of legal issues that could arise, should companies take the difficult decision to make redundancies as a result of the changes.

These include:

• If redundancies are made, staff are entitled to a full notice period and receive 100 per cent of their full pay during this time;
• Individual consultations are required before notice can be given and when there are 20 redundancies or more across an establishment collective consultation is required;
• Employees are entitled to be paid in full when looking to take annual leave. Therefore, if an employee was to take their holiday whilst being furloughed, they must be paid in full. This includes all accrued holiday up to the redundancy termination date and
• Those returning from furlough can carry over any holiday allowance into the next holiday year.

Michael Hibbs (pictured), who is a member of Birmingham Law Society, said: “The next few months are going to see the most significant changes to the furlough scheme since it was reintroduced in November.

“As a result, we could see staff being unfurloughed and being placed at risk of redundancy. Therefore, it is critical that employers and employees both understand their rights when it comes to the scheme, including those surrounding redundancy and holiday pay entitlements. ”

The furlough scheme is set to come to an end in September.