In the past few days a string of major firms have announced they will be cutting staff of closing for good as a result of coronavirus.
Up until now, millions of jobs had been protected from the fallout of coronavirus by the furlough scheme – but with a firm end date for that now in sight employers are facing tough decisions.
So far this week easyJet and Upper Crust have announced up to 6,900 jobs could be lost between them, while high street chains Harvey’s and TM Lewin went into administration. Worryingly, they’re not alone.
Money expert Martin Lewis warned this could just be the start.
“I’m afraid to say, due to the change in furlough coming on August 1st, I think hundreds of thousands of people – possibly a million – could face redundancy in the next six weeks,” he told viewers of his Money Show on ITV.
Here are the ones announced this week:
On top of these, Byron announced it’s intention to appoint administrators and Signature Living, which runs 60 hotels and other residential properties, also called in administrators.
No job losses have been formally announced at either yet, as they seek to find a way to keep their doors open through finding new buyers or selling off parts of the group.
Payday lender Sunny also entered administration, although we don’t have figures for job losses there.
Redundancy rules are complex, but in general terms companies should:
If more than 20 staff are being let go, the law says there should also be a period of collective consultation between the employer and ‘appropriate’ employee representatives (usually a union).
Assuming your firm is still trading, your employment contract should set out how much redundancy payment you are owed.
However, there is a set amount they are not legally allowed to go below – and even applies if the firm goes bust.
If you’ve been working for your current firm for at least 24 months’ in a row, how much you get depends on how old you are and how long you’ve worked there.
The limit for statutory weekly pay is currently £538 a week – based on an annual salary of £27,976.
The first £30,000 of your redundancy payout is tax-free, with payouts above that taxed at your marginal rate.
If your firm is bust, you’ll need to claim your statutory redundancy pay using the insolvency practitioner it’s appointed.
In that case – as happened with Thomas Cook – the money you get will come from the National Insurance Fund.
You can also get money from the National Insurance Fund for wages you’re owed and holiday pay.
This isn’t taxed, but does have a ‘maximum’ amount of no more than £538 a week.