News article

Coronavirus: New law to ensure furloughed employees receive full redundancy payments

30 July 2020


Government brings in law to ensure furloughed employees receive statutory redundancy pay based on their normal wages, rather than a reduced furlough rate

New law will ensure that furloughed employees receive statutory redundancy pay based on their normal wages, rather than a reduced furlough rate

 

The changes will also apply to statutory notice pay and other entitlements, providing some reassurance during this difficult time

Furloughed employees who are then made redundant will receive redundancy pay based on their normal wage, under new laws that come into force on Friday 31 July 2020.

Employees with more than 2 years’ continuous service who are made redundant are usually entitled to a statutory redundancy payment that is based on length of service, age and pay, up to a statutory maximum.

This legislation, which comes into force from Friday 31 July 2020, will ensure that employees who are furloughed receive statutory redundancy pay based on their normal wages, rather than a reduced furlough rate.

These changes will also apply to Statutory Notice Pay, which is where employees must be given a notice period before their employment ends, varying from at least one week’s notice up to 12 weeks’ notice, depending on how long they have worked for their employer. During this notice period, employees must be paid.

This legislation will also ensure that notice pay is based on normal wages rather than their wages under the CJRS.

Other changes coming into force will ensure basic awards for unfair dismissal cases are based on full pay rather than wages under the CJRS.


First published 30 July 2020