Unpaid leave notice - still able to remortgage?
Discussion
My brother in law and wife work for the same company in different departments and yesterday the company served a notice saying their departments were temporarily closing and they would be put on unpaid leave. I've had a quick look over their contracts and their is no provision for unpaid leave so guessing they should be kept on full wages. They haven't been furloughed and this event has been caused by a major contract being held up. They have sufficient equity in their property to release to tide them over but do they have to declare this notice on a remortgage application? I'm hoping no but guessing yes.
Julia121 said:
My brother in law and wife work for the same company in different departments and yesterday the company served a notice saying their departments were temporarily closing and they would be put on unpaid leave. I've had a quick look over their contracts and their is no provision for unpaid leave so guessing they should be kept on full wages. They haven't been furloughed and this event has been caused by a major contract being held up. They have sufficient equity in their property to release to tide them over but do they have to declare this notice on a remortgage application? I'm hoping no but guessing yes.
I'm thinking unpaid leave would be exactly that, unpaid. Regardless of the contract, if the business doesn't have the funds to pay them then I would imagine this is the only alternative to redundancies. Sounds like the company have realised they have missed the furlough boat and now have no alternative. In any event, it's a material fact and would need to be disclosed on any mortgage app. Do they need to remortgage at the moment or is this just to release the equity they have? If they don’t have lay-off provisions in their contracts, then usually the only way to do this is through agreement with the employees. Are you sure this was unilateral (other than the “if you don’t do it you’ll lose your job altogether” sort of consultation?).
This is why furlough (CJRS) was introduced. I’m assuming this happened after the furlough cut off?
More to this than you’ve been told.
On the remortgage point I’d say that they need to consider if this is the right way to go (if it’s at all possible as other posts suggest not) rather than getting a straight mortgage holiday to give themselves a breather and protect their savings.
This is why furlough (CJRS) was introduced. I’m assuming this happened after the furlough cut off?
More to this than you’ve been told.
On the remortgage point I’d say that they need to consider if this is the right way to go (if it’s at all possible as other posts suggest not) rather than getting a straight mortgage holiday to give themselves a breather and protect their savings.
Our son and daughter in law got planning permission at the beginning of the year for a two storey extension for thier house and a approved £50k re mortgage which obviously had to be put on hold. He and his wife were both furloughed but now have both returned to work full time as before,however after speaking to the BS again who asked if he had been furloughed he is now required to supply 3 months bank statements showing full employment from the return to work after the furlough....! Don't think this is what the government were expecting to happen to boost the economy....?
Julia121 said:
Thanks everyone. I didn't think it was a runner but on the off chance.......
They've already taken credit card and mortgage holidays but I think that scheme only runs till end of October. I don't see what anyone can do apart from family bail them out but where does that stop?
Sounds like they have no savings to fall back on.... They've already taken credit card and mortgage holidays but I think that scheme only runs till end of October. I don't see what anyone can do apart from family bail them out but where does that stop?
1. Are they members of a union? If yes, they should speak to them ASAP.
2. They’ll also be able to get free employment law advice on the legality of the lay off from various other sources - start with ACAS.
3. Get them to contact the Money Advice Service to understand the options open to them on managing their committed outgoings.
4. The Money Saving Expert website is full of all sorts of useful money advice - get them to check the forums.
EDIT: a couple of things:
What are the terms of the layoff - they’ve a good argument that, even if the layoff is allowed under their contract/consent to be laid off, they can go and to other work in the meantime. Have they sought other work? It’s also not reasonable - and therefore unlikely to be enforceable - to keep someone employed but not paid for any length of time. So I suspect the agreement to lay off will have a time limit. Proper advice required - as a family providing financial support the beat you could do is get them some decent employment law advice.
if they have a mortgage and equity then they ultimate have an asset they can sell. My understanding is that banks will try to avoid repossession for as long as they reasonably can. So they may need to be prepared consider drastic action.
Edited by OMITN on Wednesday 22 July 18:13
OMITN said:
Julia121 said:
Thanks everyone. I didn't think it was a runner but on the off chance.......
They've already taken credit card and mortgage holidays but I think that scheme only runs till end of October. I don't see what anyone can do apart from family bail them out but where does that stop?
Sounds like they have no savings to fall back on.... They've already taken credit card and mortgage holidays but I think that scheme only runs till end of October. I don't see what anyone can do apart from family bail them out but where does that stop?
1. Are they members of a union? If yes, they should speak to them ASAP.
2. They’ll also be able to get free employment law advice on the legality of the lay off from various other sources - start with ACAS.
3. Get them to contact the Money Advice Service to understand the options open to them on managing their committed outgoings.
4. The Money Saving Expert website is full of all sorts of useful money advice - get them to check the forums.
EDIT: a couple of things:
What are the terms of the layoff - they’ve a good argument that, even if the layoff is allowed under their contract/consent to be laid off, they can go and to other work in the meantime. Have they sought other work? It’s also not reasonable - and therefore unlikely to be enforceable - to keep someone employed but not paid for any length of time. So I suspect the agreement to lay off will have a time limit. Proper advice required - as a family providing financial support the beat you could do is get them some decent employment law advice.
if they have a mortgage and equity then they ultimate have an asset they can sell. My understanding is that banks will try to avoid repossession for as long as they reasonably can. So they may need to be prepared consider drastic action.
Edited by OMITN on Wednesday 22 July 18:13
They've had an update stating it's only for the period 27th July to 9th August although that will be reviewed. I've suggested taking that as paid holiday so if all goes well their bank statements will show they have been continually paid without a break for the last three months and keep fingers crossed.
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