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Under UK employment laws, you can't just force your staff to take a 20% pay cut without their consent, even if you're using the furlough scheme. And as others h
by Silhouette 7y ago
Under UK employment laws, you can't just force your staff to take a 20% pay cut without their consent, even if you're using the furlough scheme. And as others have pointed out, it may have been more than 20% in practice, if it was based on the furlough scheme where a cap applies. A lot of places that are genuinely up against it because of the virus are asking staff to take that hit voluntarily to help protect the business and their jobs, but that's different.
If you make them redundant instead then you must give them a redundancy payment as well. However, this only protects employees after two years and in any case it's capped at a low level relative to typical salaries in fields like tech, so this might not have been worth much to the staff at a startup. Many employers do offer more than this voluntarily, but I wouldn't necessarily assume any startup did.
Maybe the staff who chose to leave were more concerned about the future viability of the business, an extended pause in their career development, or both. Or maybe they really were offered voluntary redundancy on favourable terms.
Curiously, just yesterday the UK government announced some new measures aimed directly at supporting startups, particularly tech startups in their early stages that aren't yet making money. Apparently at least someone in government recognises the business model and feels it will be better to protect that part of our economy during the downturn, which is a remarkably enlightened view given how badly successive governments in the UK have treated small businesses in the past.
- barbegal 7y agoYeah lots of people aren't aware that you can refuse the UK furlough scheme. The company can then fire you but you could then take them to an employment tribunal and sue for unfair dismissal. At certain companies that are using furlough as an excuse to increase profits rather than to prevent job losses then you would probably win your case. Although obviously you should consult with a proper employment lawyer.
- Silhouette 7y agoAs I understand it, most employment lawyers are advising clients to follow the same processes as they would for redundancy in selecting staff to be furloughed etc. This ensures that if an employee does decline then proper records will have been kept and proper processes followed to make them redundant in the normal way. Given that the explicit intent of the furlough scheme is to provide an alternative for employers who would otherwise have to make staff redundant, this doesn't seem unreasonable. Obviously this means employers who are abusing the system to try to force a pay cut on people or fire them by the back door when they weren't genuinely redundant may be out of luck. I'm not sure anyone is going to have much sympathy for employers doing that, though.
- tomduncalf 7y ago>Curiously, just yesterday the UK government announced some new measures aimed directly at supporting startups, particularly tech startups in their early stages that aren't yet making money Do you have a link about this please? Hadn't heard of it until now
- Silhouette 7y agoI'm not sure the full details have been published yet. It was mentioned in the usual round of news reports last night, so I assume it was announced as part of one of the set pieces yesterday. It sounds like some sort of investment-matching scheme, where the existing investors have to put more money in to keep the business viable but the government will then make some sort of contribution as well.
- tomduncalf 7y agoAh cool, thanks for the heads up!
- deleted 7y ago[deleted]