Furloughed employees who are subsequently made redundant are set to receive redundancy pay based on their normal wage, under new laws being brought in today (Thursday 30 July).
This new legislation is aimed to protect workers and ensure all furloughed employees who are being made redundant receive their full entitlement.
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 will come into force from tomorrow (Friday 31 July), 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.