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Furlough to redundancy: St John Ambulance among job cuts


A charity supporting the NHS with thousands of volunteers during the coronavirus crisis and one of the UK’s largest travel money providers are among the businesses which could make hundreds of staff redundant having previously furloughed them, This is Money can reveal.

The St John Ambulance service is currently in a 45-day consultation over axing as many as 250 staff, around 10 per cent of its employees, some of whom were previously furloughed by the charity.

Its chief executive Martin Houghton-Brown candidly told us it has ‘seen major sources of income dry up over recent months’, and although it had ‘benefited from Government support as well as the furlough scheme’, ‘it is clear that we need to act sooner rather than later to protect our charity.’

The news comes as Chancellor Rishi Sunak today announced companies would have to start paying furloughed employees’ National Insurance and pension contributions from August, and 10 per cent of their salaries from September. The Treasury will be dropping its support to 60 per cent in October, the last month of the scheme. 

The St John Ambulance has been supporting the NHS through the coronavirus crisis, but the pandemic has hit its finances so it is consulting on job cuts

The St John Ambulance has been supporting the NHS through the coronavirus crisis, but the pandemic has hit its finances so it is consulting on job cuts

Although the charity has been supporting the NHS during the pandemic by providing staff and volunteers for ambulance crews and A&E Departments, it has lost £1.4million per week during the lockdown due to the cancellation of workplace training courses and events like festivals and football matches, which it is paid to cover.

It comes amid concerns that Britain could be facing a tidal wave of unemployment over the next few months, despite the best efforts of the Treasury’s job retention scheme which is now paying the wages of 8.4million people.

Although it staved off mass redundancies in March when Britain first went into lockdown, there are questions over how many of those millions will have jobs to go back to once it ends or when businesses must foot more of the bill. 

What did Rishi Sunak announce? 

Today the Chancellor announced how the furlough scheme would work from August, and announced an extension to the support scheme for the self-employed.

How will employers be made to pay towards furlough?

There were suggestions Rishi Sunak would ask companies to begin footing the bill for furloughed employees’ wages from August. However, the Treasury’s announcement has scotched this and instead companies will only be required to cover National Insurance and pension contributions at that point.

Instead the wages will be tapered off from September, with the Treasury paying 70 per cent of furloughed employees’ salaries, which will fall to 60 per cent in October, the last month of the furlough scheme.

The Government will cover 70 per cent of wages up to £2,190 in September, with employers to pay National Insurance and pension contributions and 10 per cent of wages, representing 14 per cent of gross employment costs.

The following month, the Treasury will pick up 60 per cent of wages up to a cap of £1,875, with employers paying tax contributions and 20 per cent of wages, representing 23 per cent of the gross employment costs, the Government said.

Currently, the Treasury pays 80 per cent of furloughed people’s wages, up to £2,500 a month.

But the announcement might not fully stave off a wave of unemployment.

This is Money has been inundated with emails from people who were furloughed and may now be laid off, while yesterday the Institute of Directors said 25 per cent of companies could not afford to contribute any amount towards the furlough scheme.

Will people be able to work part-time?

Yes. In a victory for business groups and unions, which have both called for the furlough scheme to be made more flexible, employees will be able to return to work part-time from July, a month earlier than initially expected. They will also be able to go back to work without losing any money from the Government.

The Institute of Directors said on Thursday that one-third of those it polled said they would bring the majority of their furloughed staff back part-time if they were allowed under the scheme.

The general secretary of the Trades Union Congress Frances O’Grady said the announcement ‘will help employers gradually and safely bring people back to work, protect jobs and support the economy to recover.’

As long as employees don’t return to normal hours, companies can decide the hours and shifts employees work on their return.

The Treasury said: ‘Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them – and will be responsible for paying their wages while in work.’

What about the self-employed?

Britain’s 5million self-employed were on the verge of an ‘income cliff-edge’, according to the Federation of Small Businesses, with the Treasury’s support scheme due to run out at the end of May.

Previously the Government’s rescue package, announced in March paid out a grant of 80 per cent of self-employed workers’ average profits up to £2,500 a month for three months, based on their tax returns.

The scheme, which launched for applications in May, was criticised for leaving out those who made more than £50,000 a year, and those who paid themselves via dividends through limited companies.

The announced extension to the scheme, which has seen 2.3million people sign up and claim £6.8billion, comes with a taper similar to the Treasury’s support for employees.

The new grant, which can be applied for in August, will be worth 70 per cent of a self-employed workers’ average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.

The FSB chairman Mike Cherry said the self-employed community would be ‘greatly relieved’ at the removal of the end of May cliff-edge, but called on the Government to extend the scheme to limited company directors and those who became self-employed after the end of the 2018-19 tax year.

Even though the Chancellor has pledged the Treasury will keep paying the full cost of the furlough scheme until August, This is Money has been inundated with emails from dozens of employees across the country laid off or at risk of it, having previously been furloughed.

Many companies have already started consultations with a view to making hundreds of staff redundant by the end of June, something the extension to the furlough scheme was supposed to avoid.

Prime Minister Boris Johnson told senior MPs on Wednesday that: ‘People should not be using furlough cynically to keep people on their books and then get rid of them. We want people back in jobs.’

The furlough scheme and the Government’s support for the self-employed have so far cost it £22billion, with the addition of another 700,000 employees and self-employed to the support scheme last week adding £4.6billion to the bill.

Prime Minister Boris Johnson told senior MPs at a questioning session held over Zoom that he was aware of issues with the furlough scheme and that 'We want people back in jobs'

Prime Minister Boris Johnson told senior MPs at a questioning session held over Zoom that he was aware of issues with the furlough scheme and that ‘We want people back in jobs’

Why is the St John Ambulance making redundancies? 

Martin Houghton-Brown told This is Money: ‘St John Ambulance is playing an important role in supporting hospitals and ambulance services with the national fight against COVID-19.

‘However, we are a charity and have seen major sources of income dry up over recent months.

‘This means that we need to reduce costs substantially, which might see around 250 roles being made redundant in order to secure our survival and continue serving communities in future.

St John Ambulance chief executive Martin Houghton-Brown

St John Ambulance chief executive Martin Houghton-Brown

‘We have benefited from Government support as well as the furlough scheme but it is clear that we need to act sooner rather than later to protect our charity.

‘We are consulting our employees and engaging with them in the process of finding the most appropriate solutions to reducing our costs. 

‘We want to ensure that those affected are dealt with fairly and transparently and will seek to minimise the impact of this as much as we can.’

Eurochange and Groupon consult on lay-offs 

Despite hope the extended scheme would safeguard people’s jobs, This is Money has learned that the bureaux de change chain Eurochange and the discount and experience website Groupon could potentially make hundreds of staff redundant, with Groupon potentially laying off as many as a quarter of its 438 UK employees.

Documents sent to This is Money said the company, which was already about to embark on a restructuring, had ‘experienced a significant increase in refunds in the first quarter of 2020’ due to the coronavirus, which could hit its finances throughout the rest of 2020.

It has furloughed staff in the US but did not confirm to This is Money whether it had utilised the British Government’s furlough scheme. 

It did confirm it was in talks with staff over redundancies but declined to comment on specifics.

The Treasury is now paying the wages of 8.4m people, but there are concerns over how many will have jobs to go back to when businesses have to pay more of the bill

The Treasury is now paying the wages of 8.4m people, but there are concerns over how many will have jobs to go back to when businesses have to pay more of the bill 

Meanwhile, an employee of Eurochange, which has 192 branches across the country and is owned by NM Money, told This is Money a manager said the company could potentially lay off as many as half its branch staff, which they said could leave up to 400 people out of a job.

The employee, who works in the West Midlands and has worked for the company for just over two years, has been furloughed since March.

He said: ‘It’s been both a blessing and a curse to be honest. My family have lost two members to different illnesses and conditions and I have been unable to visit family or attend their funeral services in person.

‘But on the brighter side I have managed to catch up on a lot of little tasks on what was an ever-expanding to-do list.’

Going forward, there is going to be a significant decrease in the need for travel money and therefore the amount of work available for our retail and head office teams will reduce 

Eurochange email to employees 

A document sent to ‘at-risk’ employees of Eurochange said: ‘The need for travel money has significantly reduced, if not ceased, due to the introduction of travel restrictions which resulted from the coronavirus crisis.

‘This meant that our branches lost most of their travel money business, and we closed them, along with our online business, in line with the Government’s instructions back in March.

‘Going forward, there is going to be a significant decrease in the need for travel money and therefore the amount of work available for our retail and head office teams will reduce.’

Eurochange also said they hadn’t been helped by the Government excluding travel money providers from business rates relief, despite the Post Office and travel agents, which also provide that service, being eligible for the tax break.

Eurochange’s owner NM Money also runs ATMs, a mortgage broker and an international payments service and said it would seek to retain as many staff as possible by moving them to a different part of the company.

A spokesman told This is Money: ‘Our sector has been excluded for rates relief and the grants that go with that – we don’t understand why. 

‘We, like many other retailers closed, as the Government asked us to in March, and with ‘no planes in the sky’ we effectively have no business at the moment.

‘This does mean that we are going through a process to reduce our costs which we really regret having to do – but we will do our utmost to keep our colleagues on board through the job retention scheme, and we hope to ‘open up’ as soon as we can.’

We asked the Treasury about the exclusion of businesses like Eurochange from obtaining rates relief. 

A spokesman said: ‘We have provided an unprecedented package of support for businesses, including over £40billion in loans and guarantees, cash grants to three quarters of a million firms and paying the wages of 8.4million furloughed workers.

‘We are doing everything we can to ensure companies feel the full benefits of the support on offer.’

‘I feel that there isn’t any reason for people to be made redundant’ 

Some who wrote to This is Money are upset by the news they are being made redundant, given the announced extension to the furlough scheme.

One woman furloughed by her employer at the start of April told This is Money: ‘I could understand if in July they said they were having to make people redundant but the furlough scheme is payable by the Government until July before they have to start contributing and it isn’t actually costing them anything.

‘I feel that there isn’t any reason for people being made redundant as my employer supplies goods to the building industry and the building industry will bounce back, and the reason why their trade is down is because the country went into lockdown.

‘I feel that they have jumped way too early.’

She was told last Tuesday she was being made redundant.

While companies are faced with hard choices over whether they feel their business can recover to the extent that they don’t need to lay off staff, the redundancies revealed by This is Money and those already announced by some big companies seem to suggest Britain’s labour market is unlikely to bounce back quickly from the coronavirus.

It is also a blow for the job retention scheme. Prime Minister Boris Johnson told MPs that he was ‘well aware of some of the issues’ with the way companies were using the furlough scheme. 

Can employees be made redundant while on furlough? 

For employees firstly furloughed and then told they are at risk of being made redundant, unfortunately there is no extra protection by virtue of them being on the Government-funded scheme.

While those furloughed when the scheme was first launched are unable to communicate with their employers or do any work for them, they can still be made redundant during that time, and there is no requirement for a company to bring them back to work at the end of a furlough period.

Instead, they will simply be covered by normal redundancy rules and protections. 

Rachel Farr said: ‘Although the scheme is called the coronavirus job retention scheme, the Government says that employers can consult with employees about possible redundancies while they are on furlough, and there is nothing in the guidance to say employers cannot make redundancies either during or at the end of the furlough period.

‘This is different from some other countries such as Italy, where redundancies were banned for a fixed period.’

She added: ‘Whether or not they have been furloughed, employees being made redundant will be entitled to their notice period – or to payment in lieu of their notice period. 

‘Those with more than two years’ service are also entitled to a statutory redundancy payment, and to bring a claim for unfair dismissal if they are unfairly selected for redundancy or the employer does not follow a fair process.’

You must be given one weeks’ notice if you are employed between one month and two years, one week’s notice for each year of employment if you have been employed between two and 12 years, and 12 weeks’ notice if you are employed for 12 years or more. 

Redundancy also requires your employer to consult with you, while there must be consultations between your employer and an employee or trade union representative beginning 30 or 45 days before any dismissals, if your employer is making between 20 and 99 or more than 100 employees redundant, respectively.

 Furlough doesn’t change employment rights, and furloughed employees should be reassured that they have the same protection in employment law as always

Louise Eyles, HR consultant  

Louise Eyles, an independent HR consultant, said: ‘Current Government guidance states that employers can make employees redundant during a period of furlough, or afterwards.

‘Furlough doesn’t change employment rights however, and furloughed employees should be reassured that they have the same protection in employment law as always. 

‘Employers considering redundancy will need to proceed with caution and ensure that they comply with the usual requirements regarding consultation, fair selection, searching for suitable alternative employment, notice periods and payment to avoid any suggestion of an unfair dismissal.’

More information on redundancy rights can be found here, while the Chancellor also plans to release more details on the furlough extension before the end of May.

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