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National minimum/living wage increases effective April 2021.

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On 25th November 2020, the Chancellor set out his economic plan to the House of Commons. As part of this, it has been announced that National Living Wage and National Minimum Wage rates will both increase as follows from 01 April 2021:

National Living Wage – aged 23 and over*                 £8.91

21 – 22 year olds                                                             £8.36

18 – 20 year olds                                                             £6.56

16 – 17 year olds                                                             £4.62

Apprentice rate                                                               £4.30

Accommodation offset                                                  £8.36


*National Living Wage has been extended to now include those aged 23 and over (currently aged 25 and over)

Redundancy FAQ’S during Covid

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Please see below some frequently asked questions around this complex subject. We hope that you find this information useful!

When there is a prolonged downturn in business, this often leads to situations of lay off, short time working or in many cases redundancy.  So, what has made the Government introduce new legislation from 30th July 2020 regarding redundancies?  The short answer is Covid-19: –



  1. Can I make employees on furlough redundant?’s Employees’ Coronavirus Job Retention Scheme (CJRS) guidance states that an employee can be made redundant while on furlough or afterwards, and that an employee’s redundancy rights will not be affected by being furloughed.



  1. Is there a risk to making staff redundant during the pandemic and before the Coronavirus Job Retention Scheme has come to an end?


Where the business is continuing, there is the potential for the dismissal to be unfair.  You would be encouraged to talk to your Advisor before announcing the redundancy route to your employees so that your rationale can be explored as well as your capacity to move through the coronavirus period utilising other means i.e. lay off/ short time working or furlough which may be available to you.



  1. Will it be an unfair dismissal if an employer makes someone redundant rather than placing them on furlough?


As each case will turn on its own facts, this would be difficult to determine generally.  Under section 98(4) of the Employment Rights Act, the test for reasonableness would be used and would consider the size of the employer and the resources available to it when determining whether the course of action taken was deemed appropriate.


It would potentially be reasonable that where an employer had evidence to support that it could not afford to furlough employees in March and pay the 80% of salary (pending HMRC opening the scheme on 20 April for reimbursements), that the redundancies would be seen to be fair but we anticipate that further evidence to support that employees had been consulted with, and had refused a deferred payment of wages would be needed to defend a claim for unfair dismissal in these circumstances.


Many businesses have closed during the Covid outbreak and other roles even in businesses that remain open have been genuinely eliminated. The fact that there may be a possibility that an employer may need employees in similar roles sometime in the future does not mean that an employer must furlough/continue to furlough employees. However, employers should be able to show that they have considered furloughing as an alternative to redundancy for each type of role they consider redundant, and document their reasons why it would not be suitable in the particular circumstances of the case.  Similarly, if furlough was not viable and if the employer had alternative means to weather the storm (i.e. contractual lay off and short time working clauses), they would be expected to document their reasons why these means were not viable in the particular circumstances of the case.



  1. How is collective consultation carried out during furlough?


Whether the employer is able to meet this requirement when employees are furloughed and potentially without access to the means to participate in email communication or virtual meetings is unclear. It may be difficult for employers to provide the access and accommodation required while restrictions on movement remain, and the employer may not have sufficient technology available to provide access to employees who do not have access to a smartphone or the internet.


The employer would also need to ensure that meaningful consultation can take place with the representatives, taking into account the current level of restriction on movement. It may be easier to facilitate virtual meetings for a small group of representatives, but the employer should ensure that all of the representatives have access to the relevant technology, and that it allows proper consultation to take place.



  1. Can an employee on furlough be served with notice and what notice pay are they entitled to?


We are not aware of any reason that a furloughed employee could not be served with notice of termination of employment. HMRC has also confirmed that employers can continue to claim under the CJRS in respect of employees’ statutory and contractual notice periods.



  1. How should employers approach redundancy pooling where some employees are furloughed and others are not?


We consider it unlikely that the fact that some employees are furloughed should affect the employer’s identification of selection pools.  Furthermore, we encourage a substantially sound rationale connected to pools, in particular when only furloughed groups are placed at risk.


In deciding whether a redundancy selection was fair, a tribunal must decide whether the employer’s choice of pool was within the range of reasonable responses. The usual approach is to consider the type of work, which is ceasing or diminishing, and which employees perform that kind of work. If the employer confined its selection pool to those already furloughed, this may be regarded as unfair because the selection process for putting employees on furlough may not have been as vigorous as is required where dismissal is being considered. We think it likely that the conventional approach of identifying those who perform the same or similar work (whether they are currently furloughed and therefore not performing that work, or not) should be adopted.


  1. Does scoring for redundancy change due to Covid-19?


Clients are advised to use objective criteria for redundancy selection, and to score those at risk against the matrix from the period running up to the Covid-19 outbreak and before furlough.  This is to ensure that those furloughed are not disadvantaged.  Many who were away from their roles during this time were absent due to childcare, age, or disability which adds to the risk of a discrimination claim.  If in doubt about your process, please call your Advisor.








NB: When there is a redundancy, the employee is entitled to both redundancy pay (if they have over 2 years’ service), and notice pay in line with their length of service and contractual clauses of notice. (These must conform to statutory minimum notice periods – which, after two years’ service is a week for each full year of service up to a maximum of 12 weeks).  Contractual notice may be more than the statutory minimum notice period, and where this is the case, you are obligated to fulfil the contractual notice.



  1. Can I claim notice back notice payments under the furlough SJRS?





  1. Is there anything which impact the rate of the notice pay?


Yes.  There is a lesser known point of employment law which has bearing on whether notice is payable at full pay or a lesser amount.  Essentially you need to compare the contractual notice you have stated you will give the employee for their particular length of service, against the statutory notice for the same length of service.  For example:



Length of service Contractual notice Required statutory notice What is payable?
16 months 1 month

(3 weeks more than required by statute)

1 week Because the contract gives a week or more than the statutory notice, only the furlough pay is payable.
4 years 1 month 4 weeks Full pay is applicable to the notice period because the contract does not give more than a weeks’ more notice than is required by statue.
3 years 4 weeks 3 weeks Because the contract gives a week or more than the statutory notice, only the furlough pay is payable.


Where the contract gives a week or more than a weeks more notice than is required by statue you may continue to pay at the furlough rate and will not be required to top this up to a “normal weeks’ pay”.



  1. can I claim back from the CJRS for notice pay?


Although the employee is entitled to notice at their normal rate, what you may claim back will depend upon the date of the redundancy and the framework of the CJRS during the period which immediately follows.  Detail is currently as follows:



  • The CJRS will remain at 80% contribution (£2,500 cap) for the hours the employee does not work. Meaning there is also a 20% deficit you will have to fulfil from the business.
  • You will be required to pay the employers National Insurance and Pension Contributions.



  • The CJRS will drop to 70% contribution (£2,187.50 cap) for the hours the employee does not work. Meaning there is also a 30% deficit you will have to fulfil from the business.
  • The employer is required to pay employers National Insurance and Pension Contributions.
  • The employer is required to top up 10% of the wage of non-worked hours (up to the cap of £2,500)
  • and if working part-time, remains responsible for payment of 100% of pay for worked hours.



As above but…

  • The CJRS will drop to 60% contribution (£1875 cap) for the hours the employee does not work. Meaning there is also a 30% deficit you will have to fulfil from the business.
  • The employer is required to top up 20% of the wage of non-worked hours (up to the cap of £2,500)



  1. Can I enforce annual leave during a notice period related to redundancy?


In short, yes however, conditions apply!


Under Regulation 15(2) of the working Time Regulations 1998 you are required to give express written notice of the dates on which you are directing leave to be taken.


In compliance with the regulations, the notice must double the amount of notice as the days leave, you are requesting your employee to take.  i.e. if you are directing 5 days, you will be required to give 10 days written notice of this.  Contact your Advisor for specific wording or for them to draft your outcome letters.



  1. Can I claim back redundancy payments under the furlough scheme?


You cannot claim reimbursement of redundancy payments under the scheme (Employers’ CJRS guidance).



  1. My employees have been made redundant and have been on furlough on the run up to their redundancy. What do I base their redundancy payments on?


A change in legislation which came into effect on the 30th July 2020 means that employees made redundant while on furlough will be guaranteed redundancy pay based on their normal wage and not their furloughed rate under new legislation.


Under the change, furloughed workers would also be entitled to statutory notice pay equivalent to their normal wages, and any future unfair dismissal cases would be based on their full wages rather than pay under the furlough scheme, which can in some cases be substantially lower than an employee’s contracted pay.


Please talk to your advisor before you take any action.

Job Retention Scheme Bonus

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Yesterday the Chancellor announced the introduction of the Job Retention Bonus.
This is a one-off payment of £1,000 to employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 312021. The bonus will provide additional support to retain employees.

To be eligible, employees will need to:
• earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January
• have been furloughed by you at any point and legitimately claimed for under the Coronavirus Job Retention Scheme
• have been continuously employed by you up until at least 312021.
Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31January has been received. More information about this scheme will be available by 31so we will keep you updated!

Furlough changes from July 1st 2020

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On 29 May 2020, the Chancellor announced the following:

  • From 1 July 2020, furloughed employees will be able to return to work on a part-time basis. Employers will pay in full for days worked and can claim under the CJRS for days not worked, subject to the relevant caps.
  • From 1 August 2020, employers will be required to contribute towards the costs of furloughing employees.
  • From 1 September 2020, Employers will also be required to pay 10% of employees’ pay, capped at £312.50. The government will pay 70% of employees’ pay, capped at £2,187.50.
  • From 1 October 2020, Employers will be required to pay 20% of employees’ pay, capped at £625. The government will pay 60% of employees’ pay, capped at £1,875.

Dont forget, only employees who have been furloughed for a continuous 3 week period before 30th June can be furloughed/part furloughed after 1st July 2020, UNLESS they have been on statutory family leave or a military reservist on a period of mobilisation.

To do:-

  1. Employers and employees will need a new signed agreement if the old one had an end date or you will be having them work some of their time (ask your advisor for one)
  2. The ‘3 week’ minimum furlough will no longer exist, therefore you can consider rotating your furloughed employees or increasing/decreasing the work they carry out throughout this period (with their agreement)

Note – Employees do not have to be given some work, they can remain on full furlough subject to business needs.

Further Developments to the Coronavirus Job Retention Scheme (CJRS) Furlough

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After the announcements at the end of May 2020,  lobbyists have been successful in bringing about the following amendments which were agreed on the 9th June:


  1. There will be no minimum furlough period from 1 July 2020. However, any furlough arrangement agreed between employer and employee reported in a claim to HMRC must still cover a period of at least a week


  1. From 1 July 2020 employers can only claim from the CJRS in respect of employees who were furloughed on or before 10 June 2020, with the exception of those who are returning to work following a long period ofstatutory family leave.


Talk to your Advisor if you have any queries.

Coronavirus Job Retention Scheme: Key Dates

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1st June 2020

Coronavirus Job Retention Scheme: Key Dates

On the 29th May Rishi Sunak gave an announcement on the changes to the CJRS (Furlough Scheme).


Key dates


July 1st until the 31st August

From the 1st July you may bring employees back off furlough and place them on whatever hours you need them for.  The employer will be responsible for 100% of the employees’ wages for the hours they work but you may claim back 80% of the furloughed hours via the CJRS.


To implement this, you will need:

  1. to confirm the working hours/patterns to your employees in writing.  The minimum period you must do this for is one week although you may confirm the pattern/hours in writing for longer periods.
  2. To submit data on the normal hours the employee would be expected o work in the claim period and the hours they actually work in line with the temporary written agreement.


You may continue to use the scheme in its current form for those you do not have work for or who remain unable to return to work.


Detail of tapering and employer contributions:


June and July

The current scheme will exist with the additional flexibility allowing employers to bring employees back part-time.  Employers will be responsible for paying employees for hours worked if they come back part time as detailed above but can claim 80% of the unworked hours.



Both the above will still exist but instead of the scheme paying the employers National Insurance and Pension Contributions, this responsibility will pass back to employers.



  • The CJRS will drop to 70% contribution (£2,187.50 cap) for the hours the employee does not work.
  • The employer is required to pay employers National Insurance and Pension Contributions.
  • The employer is required to top up 10% of the wage of non-worked hours (up to the cap of £2,500)
  • and if working part-time, remains responsible for payment of 100% of pay for worked hours.



As above but…

  • The CJRS will drop to 60% contribution (£1875 cap) for the hours the employee does not work.
  • The employer is required to top up 20% of the wage of non-worked hours (up to the cap of £2,500)


Employer Allowance:

If you are a smaller employer some or all of your NICS bills are covered under Employer Allowance.  Please visit the HMRC website to assess your company’s eligibility.



THE CJRS Scheme closes to new entrants on the 30th June.  You may only claim from the scheme after this date for employees who have been furloughed for a full three-week period prior to 30th


June meaning that 10th June would be the last date for any new furlough entrants to enter the scheme.



Employers will have until 31st July to make claims for the period to 30th June.


Webinars giving guidance on calculating claim back via the flexible scheme will be published on on their ‘Coronavirus Job Retention Scheme’ pages.



This information is accurate at the time of publish. Please speak to your Accountant for any HMRC and payroll queries. Please contact your Elcons Advisor for any HR issues with your employees 01422 822842

Making redundancies during Covid-19

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The further extension of the job retention scheme could open up employers to legal action if they make people redundant while it is still running.
There are obviously some situations such as closure where redundancies may be necessary, however, you would need to be able to evidence that you have considered furlough as an alternative and why this wasnt a viable solution.
If however you do need to make redundancies, make sure you follow a full process, this can be done whilst employees are furloughed.