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Real Life Money: Your work rights

2020 has shifted the way many of us think about work for the foreseeable future. But with job insecurity on the rise and a shift to more flexible working for many, what do we need to know about our work rights? Our Real Money Correspondent, Laura Whateley, explains.

Is the way we work ever going to be the same again? 

According to official figures, people claiming unemployment benefits grew to 2.7 million between March and July. Many on furlough are uncertain whether they will have jobs to return to, and economic analysts warning of a “looming cliff edge” of unemployment that faces us this autumn.

Even if your job isn’t immediately at risk, if it was office based before the Coronavirus pandemic, you may be thinking about what your future working week will look like. The government is encouraging us to head back to offices if we can, to save our city centre shops and restaurants, but many are reluctant, looking at a new future of indefinite home working and living room yoga. Many large employers such as Google and Facebook have said employees can work from home at least for the rest of the year. 

 With so much uncertainty, now feels an important time to understand your work rights and their implications for your money. Here I look at what you’re entitled to if you’re made redundant, your legal entitlement to things like pay and pension if you’re joining a new company and, if you’re addicted to the downstairs commute, how you can get paid to WFH into 2021 and beyond.

Redundancy

If you are at risk of redundancy

Many people’s first concern is their finances. Can you afford to lose your job? What will happen if you do?

Now is the time to make sure you understand the true cost of your unavoidable commitments and, if possible, shore up any emergency savings, making sure they are in cash in an account that is easy to access if and when you need it. 

Don’t be afraid, if you go on to lose your job, to access these savings. That’s what the pot is there for, and you can top them up once you have found a new role and are earning again.

When looking at your normal spending pattern, divide up your outgoings into essential and non-essential, and focus on how much money you need to meet the ones you cannot avoid for the forthcoming months. This is particularly important when it comes to bills and debts. Prioritise paying those that are most important, for example, the ones that keep a roof over your head or the lights on.

Try to minimise all of your debts as much as possible while you still have a salary coming in. If you are paying interest on credit cards, and you can’t afford to clear them in one go, consider moving debts to a 0 percent card to give yourself some breathing space for a few months, to either save up for your emergency pot, or take any pressure off another job search. 

That said, don’t apply for too many loan products at once in a panic. Redundancy doesn’t impact your credit file in the short term, but your creditworthiness will take a hit if you try to take out too many financial products at once. 

Many lenders will also want to see that you are employed or have a regular income before they lend, so it might be a good idea to make sure you’ve switched on to the best, cheapest deals on things like your mortgage     , before you leave your job. 

If you have been made redundant

First, understand what money  you can expect from your employer.

There are strict rules and processes your employer must follow when making staff redundant and once you’ve been continuously employed for two years you are entitled to some redundancy pay by law. This is known as statutory redundancy pay. If you’re under 22, this amounts to half a week’s pay for each full year you’ve worked for your employer. This rises to one week’s pay for each full year if you’re aged between 22 and 40. Over 41s get one and a half week’s pay, with the length of service capped at 20 years.

You can also expect some notice for redundancy, which should give you a little time to work out how you will cover the bills. If you’ve been with your employer for less than two years you only get one week’s notice for redundancy, after two years you get one week’s notice for each year you’ve worked there up to 12 years, and 12 weeks’ notice if you’ve been there for 12 years or more. 

Coronavirus doesn’t affect your redundancy rights, so even if you were or are on furlough, and therefore being paid less, your redundancy pay is based on your normal pre-furlough wage. This is also the case if you are on maternity or shared parental leave. Your redundancy pay is based on what you were earning before you went on leave. 

However, you could find you’re paid more on top of this as many employers will offer contractual redundancy pay, which tends to be more generous. This will be written in your job contract. 

If you have outstanding holiday, you will either be offered the chance to take it or be paid the money owed for days you haven’t taken. If your employer goes bust, you are entitled to the same statutory redundancy pay, and someone should contact you to let you know how to claim it.

And remember, you don’t have to pay tax on the first £30,000 of any redundancy payout.

If you are really struggling to pay the bills, make sure you speak to your lenders as soon as possible. Ignoring the problem will only make your situation worse as your debts will start to mount. In today’s climate, you may find your lenders are more understanding than you feared, so get in touch. You might also have payment protection insurance that you can use to cover a period when you’re out of work, or you might find your lender allows you to take a mortgage or loan payment holiday for a while until you are in a stronger position to repay. Make sure you understand what this might mean for your credit file and future ability to borrow before you agree to any plan. 

Don’t suffer in silence, debt charities such as StepChange can help talk you through your options if you’ve lost your job. Here’s some tips from StepChange on how you start that conversation, and what to expect when you do.

If you don’t feel you have received the redundancy payout you deserve, or you think your employer hasn’t treated you fairly, the Advisory, Conciliation and Arbitration Service, at Acas.org.uk has lots of brilliant advice. 

Finding a new job, and what to look out for 

Statutory rights vs. your employment contract

As an employee, certain benefits, such as paid holiday, sick pay and employee pensions are protected by law. These rights are known as our statutory rights, and employers cannot breach them. You will also have a contract, a written agreement between you and your employer, detailing other responsibilities or financial perks, but your statutory rights override anything that’s in your contract. 

Those to be aware of include:

  • your right to 28 days of paid holiday a year (including bank holidays) if you work full time
  • your right to take up to 28 weeks of sick pay at £95.85 a week, starting from the fourth day you are off sick (unless you have Covid-19 when it’s from day one)
  • your right to the national living wage of £8.72, from April 2020, if you’re aged 25 or over, £8.20 if you’re between 21 and 24, and £6.45 if you’re aged 18 to 20. 
  • parental or adoption leave of up to 52 weeks. 50 of these weeks can be taken by either partner, 37 of which are paid.

If you earn more than £10,000 you should be automatically enrolled into a company pension. The joint contributions between yourself and your employer must be 8%, and your employer must contribute at least 3% of your salary, but they can contribute more. 

Your employer might offer more of all of the above – many do – but they should not offer you any less. If they are in breach of the rules, challenge them. 

Make sure, when you join a new company, you read the staff handbook thoroughly, and understand if and when it can be updated. The handbook may lay out things like a workplace policy on bonuses, pay rises, health insurance or company cars, that could alter year on year. You then need to scrutinize your contract, which will be more specific about what you will get as part of your employment package. This can’t be changed without your permission i.e. you can’t have your salary altered, unless you agree to it.

Can you work more flexibly?

Lockdown has changed many attitudes to working from home, shining a light on how challenging it is to commute to a 9 to 5 and juggle things like childcare, or affordable house prices. And it’s led to a current discussion in parliament about whether the law might change to allow office workers more flexibility in their contracts. 

For now, the UK law states that you can at least ask for a flexible working arrangement. Provided you have been with your employer for at least six months, you can request flexible working, and your employer is obliged to consider your request seriously. Flexible working might mean working from a different location to the office, doing compressed hours for the same pay, going part time, or finishing early or starting late some days. 

As everyone’s flexible working needs are unique to them, putting together a written request, detailing why you want flexible working, is a good first step. Including details will help your employer understand your needs. For example, explaining your caring responsibilities, or that you feel you will be more productive working from home on some days. These arguments will be harder to say no to than putting in a request that looks like you just want to have a lie in more often. Your boss has three months to meet you, discuss your request and let you know what their decision is. They can say no, but it needs to be for a specific business reason such as the fact they cannot afford it. Don’t take the first no for an answer and appeal it if you believe there is good reason to do so. 

Finding out more

There’s a lot to think about, so if you need more information on your work rights, you can start with:

The Citizens’ Advice Bureau for confidential advice.

Acas, the Advisory, Conciliation and Arbitration Service, for support on workplace disputes

Www.gov.uk for lots of information from the government, for example on your redundancy rights or flexible working

Laura Whateley is a freelance writer and author of Sunday Times bestselling book Money: a user’s guide. She has written for a wide variety of publications including The Times, The Guardian, Grazia, Refinery 29, Elle and Stylist Magazine. All views are her own.