New law to ensure furloughed employees receive full redundancy payments
Furloughed employees who are then made redundant will now receive redundancy pay based on their normal wage, under new laws.
Throughout the pandemic, the government has urged businesses to do right by their employees and pay those 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.
New legislation has been brought in to protect workers and ensure all furloughed employees who are being made redundant receive their full entitlement.
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. This legislation will ensure that employees who are furloughed receive statutory redundancy pay based on their normal wages, rather than a reduced furlough rate.