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Furloughed workers to receive full redundancy pay under new law

By Huw Hughes

31 Jul 2020

The UK government introduced a new law Thursday to ensure furloughed workers who lose their jobs will receive statutory redundancy pay based on their regular wages, rather than a reduced furlough rate.

The changes will mean furloughed staff who are made redundant won’t be “short-changed”, the government said.

Announced in March, The Coronavirus Job Retention Scheme sees the government pay up to 80 percent of the salaries of furloughed employees, up to a maximum of 2,500 pounds a month. It is currently supporting over nine million jobs across the UK.

In May, chancellor Rishi Sunak announced the scheme would be extended from June until October but said from August firms would be asked to “share with the government the cost of paying salaries”.

In July, the government announced that UK employers would receive a one-off bonus of 1,000 pounds for each furloughed employee that returns to work under The Jobs Retention Bonus.

“We urge employers to do everything they can to avoid making redundancies, but where this is unavoidable it is important that employees receive the payments they are rightly entitled to,” said business secretary Alok Sharma in a statement.

“New laws coming into force today will ensure furloughed workers are not short-changed if they are ever made redundant - providing some reassurance for workers and their families during this challenging time.”

Photo credit: FashionUnited