Furloughed employees entitled to receive full redundancy payments

July 30, 2020

The government have just announced the introduction of a new law which will mean that employees who have been furloughed are entitled to receive their statutory redundancy pay based on their normal wages rather than furloughed wages.

This new law will come into effect from today (30^th July 2020) but will come into force from the 31^sT July 2020. This move will ensure that employees are protected and will ensure that they receive their full entitlement if they are made redundant.

When calculating statutory redundancy pay, this is based on length of service, age and gross weekly pay (up to a statutory maximum).

For the purposes of calculating redundancy pay, this new law will mean employers have to use an employee’s normal wages to calculate their entitlement to statutory redundancy pay rather than their reduced furlough rate.

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