Q&A: Reservists and money matters

With 6,000 reservists now being called up for a possible war with Iraq, BBC News Online examines where that leaves their day jobs and the companies they are leaving behind.

Why are these people being called up at all?

The former servicemen and women - and members of the Volunteer Reserves - are being "called up" under what is known as mobilisation - making extra forces available for military operations.

This Reserve Forces Mobilisation Act 1996 states that mobilisation can take place under three circumstances:

-if a national danger appears imminent

- if it appears that warlike preparations are in progress

- if it appears necessary to use Armed Forces outside the UK for the protection of lives.

How does the process actually take place - who informs the employer that they will be without a member of staff?

An employee receives his or her so-called 'call up' letter, together with a letter to present to their employer.

The letter sets out the date and possible duration of the mobilisation and informs the employer of its rights to apply for an exemption.

The normal notification period is at least two weeks, although it is unlikely that reservists would be called without the general public, and hence the reservists, already being aware that this was a possibility.

The two-week period is deemed sufficient by the mobilisation act for reservists to "put their affairs in order".

So does the reservist have to go?

If the employer can prove that the reservist's absence would have an adverse effect on the business, or that he or she is needed by the company, then it can appeal.

The company can seek either a total exemption or a deferral of mobilisation, but cannot sack the employee because they have been called up.

It can also appeal if the employee's absence would cause "serious harm" to any other business, a partner or other employees.

The definition of "serious harm" varies between firms, but regulations specifically state it must mention the serious loss of sales, markets, reputation, goodwill or other financial harm.

It can also mean the loss to research of new products or services.

An employer must appeal within seven days of receiving the mobilisation letter.

Supposing the reservist does go - doesn't this leave big gaps?

Reserve Forces Regulations provide different types of financial award that the company can apply for - irrespective of whether the reservist has been voluntarily or compulsorily mobilised.

The basic Employers Standard Award covers initial replacement costs, such as the price of advertising and interviewing a replacement.

It also covers any agency fees and the cost of retraining the reservist upon their return.

A company may also be eligible for a Hardship Award, if the standard award didn't meet the full costs.

What about the reservists and their families?

The reservist can claim for extra financial assistance if his or her military salary is less than their package at work.

The reservist is also entitled to remain a member of his occupational pension scheme. In such cases, the Ministry of Defence (MoD) will pay the employer's pension contribution, provided the employee keeps up their payments.

Alternatively, the reservist can opt for Armed Forces' pension scheme benefits.

What about a reservist's other "financial affairs" such as life insurance?

Mobilisation could affect a reservist's life insurance and personal effects insurance, making them invalid unless he or she informs the insurance company of their change in circumstances.

The MoD and War Pensions Agency also provide financial provisions for ill health or death when this is shown to be the result of their service.

However, they also recommend that the reservist consider taking out further insurance.

"The need for additional insurance is an important consideration for the protection of Reservist and their families.

"It would therefore be sensible for Reservists to consider taking up such insurance," says SaBRE - Supporting Britain's Reservists and Employers, which offers advice to companies with reservists on their payroll.

What happens when the reservists come back?

Their former employer is bound to re-employ them if they wish to return to their old job.

However, reservists must stick to certain date limits and re-apply within a certain time after their return.

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