Redundancy: furloughed workers must receive full notice pay

The government has today announced that it is bringing in a new law to make sure furloughed employees who are made redundant receive full pay during their notice period.

As we discussed in our FAQ about furlough and redundancy calculating the notice pay of a furloughed employee depends on the whether they are entitled to more notice than the statutory minimum and whether they had normal working hours or their hours varied. In many cases, this means that redundant employees receive less than would have received had they not been furloughed.

The new rules, which have not yet been published, will mean that employers must calculate notice payments by reference to their employee's normal salary rather than their furlough wage. The government has said that the law will apply from Friday 30 July 2020 (tomorrow).

It's also been reported that the legislation will also ensure basic awards for unfair dismissal cases are based on full pay rather than wages under the furlough scheme. We'll update you once the legislation is published.

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"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."”