Can your employer cut your wages due to coronavirus and do you have to accept it?
THE coronavirus outbreak has caused a cash crisis among workers and businesses, with many being unable to operate, drastically affecting profits and income.
All non-essential shops, pubs, restaurants and cafes have been forced ordered by the government to temporarily close doors for the foreseeable future.
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Some businesses have been forced to shut up shop because customers have dried up or workers are isolating to stop the spread of COVID-19.
But despite the government's Coronavirus Jobs Retention Scheme, many employers are asking staff to reduce their hours, take a pay cut or to be furloughed.
With the help of experts in employment law, we take you through your rights if your employer asks you one of the following:
To take a pay cut
Your employer may look at reducing your pay in an attempt to reduce their overheads if they're struggling to stay afloat.
If this is the case, then they must ask for your consent first - it's illegal in the UK to impose a reduction without permission.
Let's say your employer has cut your pay without asking you first, there are two options for you.
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You can either resign and then make a claim against the company for unfair dismissal.
Or your can remain working in your job "under protest" and claim compensation from your employer to cover their loss of earnings.
You are completely within your rights to refuse a drop in wages but if your employer can't afford to keep you on at your current pay, then it may look to end your contract completely.
Adam Pavey, employment solicitor at Poole Alcock Solicitors, warned that if a contract was terminated then the employee wouldn't be eligible for furlough and could be left completely without income.
"Unless there is a clause in your contract which allows your employer to [cut your pay] you can refuse," Adam Pavey, employment solicitor at told The Sun.
"If they tried to enforce this you could in theory take your employer to a tribunal for breach of contract or for what is called an unlawful deduction of wages.
"However, in the present situation you may be waiting a long time to have your case heard and so this is unlikely to be a good option.";
To reduce your hours
Employers can only tell you to reduce your hours if it's already outlined in your contract saying that they can.
If not, then they can't force shorter hours and cut your pay as a result without consulting you first.
You can refuse your employers proposals but they may also look to end your contract completely if the can't afford to keep you on.
There must be a fair consultation period before they do this.
To go on furlough
If you're unable to go to work because it's considered to be non-essential, you're self-isolating, in quarantine or unable to carry out your job from home then your employer may ask you to go on furlough.
This is part of the government's Coronavirus Jobs Retention Scheme and will see them cover 80 per cent of your wages - up to £2,500 a month - if you're unable to work.
Your employer can then choose to top up your salary with the remaining 20 per cent but it doesn't have to.
Who can be furloughed?
ANY UK employer can apply for the furlough scheme, including business, charities, recruitment agencies and public authorities.
Employers as varied as and Premier League clubs Newcastle and Tottenham have already furloughed some of their workers.
However the government does not envisage making significant payouts to public sector employees as they believe most will continue offering essential services.
Where employers are receiving public funding for staff costs, they will be expected to continue using these funds to pay staff rather than applying for the furlough scheme.
If you are working at reduced hours and pay, you will not be eligible for furlough and it will be up to your employer to pay you as normal.
You must have created and started a PAYE payroll scheme on or before February 28, 2020 and have a UK bank account.
"In an ideal scenario a business would ask for volunteers to be furloughed and this is what has been happening in general," said Sebastian Mattern, lead consultant for employment at .
"Whilst pay is reduced, an employee on furlough retains all employment rights and even accrues annual leave whilst on furlough.
"There is no direct or legal consequence of refusing furlough but it’s obviously a risk as the alternative is usually redundancy."
He added that for employees who've been working there for under two years, this can be a simple process as newer workers have fewer rights than those who've been working longer.
If you are asked to be furloughed, your employer should get your agreement in writing so you may be asked to sign something to reflect this.
Employers have to keep you on the payroll for you to qualify and you have to be furloughed for a minimum of three weeks.
This can be backdated to March 1 and extended for up to three months if necessary.
The government will pay your salary, and any relevant national insurance and pension contributions, through a grant.
The portal that employers use to let the government know that you've been furloughed isn't due to go live until the end of April.
That means you might not get paid until then, unless your employer is able to afford to pay you before they get the grant money.
Unfortunately, being furloughed doesn't mean that you're protected from being made redundant.
To change your annual leave
All workers on PAYE payroll have the right to statutory annual leave that must be taken before the year is out.
But most contracts have a clause in it that specifies that holiday can only be taken when it's convenient for the employer.
Your employer may ask you to take some of your annual leave earlier than you'd planned or cancel some that you had lined up because of the coronavirus crisis.
Staff have no other option really but to accept the employer's wishes.
But bosses have to give you the right amount of notice before cancelling your holiday.
How much statutory annual leave am I entitled to?
HOW many days holiday you're entitled to depends on how many hours your contracted to work.
Full time employees working a five day week must receive 28 days - or 5.6 weeks - paid annual leave a year.
Part-time staff are also entitled to 5.6 weeks of paid annual leave but this will be fewer than 28 days.
For example, if you work three days a week then you are entitled to 16.8 days leave a year (3x5.6) because that's how long your working week is.
Adam explained: "The employer can cancel leave if they give the employee notice of at least the same length as the period of leave to be cancelled.
"So if you have four days booked the employer would have to give you four days notice."
Sebastian points out that in normal circumstances, this could lead to the employee not taking their full entitlement by the end of the year, meaning the employer could face a hefty fine.
But an amendment to the Working Time Regulations due to the pandemic allows employees who haven't taken all of their entitlement due will be able to carry over up to four weeks of unused leave over into the next two years of annual leave.
These are temporary new rules introduced by the government to allow key workers to continue working in the face of the coronavirus lockdown without losing their annual leave.
It also eases the pressure on key businesses who could be left short-staffed during the fight against COVID-19, such as in the food and healthcare industries.
Bosses must give staff the opportunity to take their annual leave at a later date though, and can't replace it with payment in lieu unless the worker is leaving employment.
Your employer makes you redundant
Your employer should still carry out a fair redundancy process if it intends to end your contract.
If you've been working somewhere for at least two years, you will be entitled to be consulted on the redundancy lay-off first and to receive a statutory redundancy payment.
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How much you're entitled to depends on your age and length of service, although this is capped at 20 years. You'll get:
- Half a week’s pay for each full year you were under 22,
- One week’s pay for each full year you were 22 or older, but under 41,
- One and half week’s pay for each full year you were 41 or older.
There should be a period of collective consultation as well as time for individual ones if your employer wants to make 20 or more employees redundant within 90 days or each other.
You are also entitled to appeal the decision by claiming unfair dismissal within three months of being let go.