Posted on 15th May 2020

As employers rushed to furlough staff, it is likely that many of them breached the contracts of the workers they furloughed and, in paying them reduced salaries, made what are called “unlawful deductions from wages”. Furloughed staff may have claims for breach of contract or unlawful deduction from wages in the Employment Tribunal.

Does this include you?

The starting point and basic principle is that every worker has the right to be paid their full salary by their employer as set out in their contract.  Just because the government offered under the furlough scheme to reimburse only 80% of the salary of employees (up to £2,500 a month) this does not mean that employers had the right to force furloughed workers to accept a reduction of salary to 80% or £2,500 a month, even if they were unable to attend work. The only way to reduce salary lawfully was by consulting with and agreeing with the reduction with the employee. It should have been the employee’s choice whether to accept that reduction to salary in advance of being put on furlough. Many employees were not given this choice and their employment rights were a breach of contract.

If you have been paid less than your full salary without having agreed to this in writing then your employer will likely to be in breach of contract and you may have a claim.

What if my employer topped my wages up?

If you have been furloughed but your employer has topped your wages up to normal levels your contract will not have been breached and you will not have a claim.

However, if 80% of your normal salary is more than £2,500 a month but your employer has only topped you up to 80% not 100% your contract may still have been breached and you may still have a claim.

What if I agreed to receive only 80% of my salary?

Whether you have a claim will depend on whether you agreed in writing to accept a reduced salary during furlough. You could have agreed in writing by countersigning a letter from your employer, or by sending an email or even by a text or WhatsApp message.

If you did agree to accept a reduced salary in writing and in advance of going on furlough you probably do not have a claim for unlawful deduction from wages for the difference in your salary. You may have other types of claim if you feel you were not meaningfully consulted before signing or if you think you were selected for furlough unfairly or because of discrimination.

If you agreed to the reduction in writing but only after being put on furlough, you may still have a claim but it may be less valuable.

If you only agreed to a reduced salary verbally – whether in person or over the phone – your employer did not have the right to reduce your salary and you may well be able to bring a claim in the Employment Tribunal to recover the difference. This will be the case even if the employer followed up that conversation in writing, for example by sending you a letter confirming the terms of furlough. The key point is whether you at any point put in writing that you agreed to the reduction.

So what do I do now?

If you want to take some legal advice about your rights, please contact us, and we can put you in touch with a lawyer who specialises in employment law. They can check if you have a potential claim and advise you how to proceed.

NOTE: Nothing in this blog constitutes legal advice. It summarises the law. If you need advice about your rights, you need to seek legal advice from a qualified lawyer.