Furloughed workers will receive full redundancy under new law

30 July 2020, 09:29

The move will ensure furloughed employees receive statutory redundancy pay based on their normal wages
The move will ensure furloughed employees receive statutory redundancy pay based on their normal wages. Picture: PA
EJ Ward

By EJ Ward

Workers on furlough who lose their jobs are set to receive redundancy pay based on their normal wage under new laws being brought in on Thursday.

The Government said it will ensure those being paid a reduced rate while on furlough will get statutory redundancy pay based on their normal wages.

The move will ensure those furloughed under the coronavirus job retention scheme are not short-changed if they are made redundant, the Government said.

Ministers said the change would work towards providing some reassurance "during this difficult time".

The new rules will also apply to statutory notice pay and other entitlements.

The furlough scheme has protected the jobs of millions of workers, with the Government paying 80% of their salary, but it is being wound down from August and stopped altogether in October.

The Government said that throughout the pandemic it has urged businesses to pay those being made redundant based on their normal wage rather than their furlough pay, which is often less.

Most businesses have done so but there are a minority who have not, Business Secretary Alok Sharma said.

He added: "The Government is doing everything it can to protect people's livelihoods and we are supporting more than nine million jobs through the coronavirus job retention scheme.

"We urge employers to do everything they can to avoid making redundancies but where this is unavoidable it is important that employees receive the payments they are rightly entitled to.

"New laws will ensure furloughed employees are not short-changed and are paid their full redundancy pay entitlement - providing some reassurance in an undeniably testing time."

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

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