UK ensures furloughed staff get full redundancy payments

The UK government yesterday brought in legislation to protect workers and ensure all furloughed employees who are being made redundant receive their full entitlement. Furloughed employees who are then made redundant will receive statutory redundancy pay based on their normal wage under the new legislation that comes into force beginning today.

Throughout the pandemic, the government has urged businesses to pay employees being made redundant based on their normal wage, rather than their furlough pay, which is often less. The majority of businesses have done so, however, there are a minority who have not.

Employees with more than two 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.

Business secretary Alok Sharma said the new laws will ensure furloughed workers are not short-changed if they are ever made redundant , providing some reassurance for workers and their families during this challenging time.

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 Coronavirus Job Retention Scheme (CJRS), according to an official release.

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

 

 

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