The Department for Business, Energy & Industrial Strategy has confirmed that from today (Friday, 31st July 2020) furloughed employees who are made redundant will receive redundancy pay based on their normal wages, not the wages they have received whilst on furlough.
Upon making this announcement, the Government commented that a number of companies across the UK had paid statutory redundancy payments to employees based on the wages they were receiving whilst on furlough under the Coronavirus Job Retention Scheme (CJRS) i.e. 80% of their normal employment earnings.
Business Secretary, Alok Sharma, commented:
“It is important that employees receive the payments they are rightly entitled to…
“The government is doing everything it can to protect people’s livelihoods.
“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.”
Redundant employees who have more than two years’ service are entitled to statutory redundancy pay which is based on the length of service, age and pay, up to a statutory maximum limit.
Further information in relation to employee rights and redundancy can be found here.
How Nelsons can help
Peter Nicholson is a Senior Associate in our specialist Employment Law team.
For further information in relation to the CJRS, employee rights regarding redundancies or any related subjects, please contact Peter or another member of the team in Derby, Leicester or Nottingham on 0800 0241 976 or via our online form.