The Government has brought in new legislation to ensure employers pay redundancy based on full pay, not furlough pay.
Furloughed employees who are made redundant will receive redundancy pay based on their normal wage, under new laws which come into effect tomorrow.
The law has been introduced because a minority of employers have been basing redundancy pay for those who have worked with them for two years or more on furlough pay, despite the Government saying it should be based on normal wages.
The new rules 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 based on their normal wages rather than their furlough wages.
Other changes coming into force will ensure basic awards for unfair dismissal cases are based on full pay rather than furlough pay.