paid over £37,500? or short service? or contract varied?

Employees having contracts varied, being dismissed or made redundant, even with just weeks or months service, will have just accrued claims for up to 13 weeks full pay that neither they nor the employer had any clue about.

And employees paid over £37,500 may also be in much stronger position than they know.

including < 2 years service

It is reported that many employers, especially in London, are dismissing large numbers of employees without prior notice or consultation.  If the number is over 20, the failure to consult gives rise to what is effectively a penalty payment for the employees to claim.  Depending on numbers, this is up to 13 weeks pay without cap on the amount of weekly pay.

If variations to contracts are imposed unilaterally for 20 or more employees, the same consultation claims arise as described above.

There is no requirement for any particular length of service in either case.

Paid over £37,500

This is the maximum salary above which the £2,500 cap on monthly furlough payments at 80% normal wages applies.  The more employees earn above that, the more they may be inclined and in a position to negotiate top up payments to the furlough or to resist being laid off at all.

Variations to contracts

Employers and employees need to consider carefully the terms on which any lay off or furlough is agreed and recorded.  Employers will will want to vary contracts immediately so as to reduce payments and to keep salaries reduced after furlough in view of difficult times ahead.

Employees will want to use their notice periods to delay reductions and to resist being railroaded to accept new terms at all.  The longer the notice periods and higher the salaries and benefits, the more power the employee may have in the negotiations.

There are also real risks for the employer if variations are imposed unilaterally.  If done lawfully, it may amount to a dismissal.  If done in breach of contract, it may be the variation will not apply at all.  How to deal with these situations may need careful consideration on both sides.

Get in touch if you are highly paid and/or have been dismissed with a large number of others but without any consultation.


Links to main government websites guidance for the job retention scheme guidance to employers and businesses about covid-19 support for businesses


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