Employment Legislation

What Redundancy Payments do Furloughed Employees Receive?

Legislation

What Redundancy Payments do Furloughed Employees Receive?

Due Date

31 July 2020

Summary

All employees are entitled to receive statutory redundancy pay if they have been working for their current employer continuously for at least two years. The payment is based on length of service, age and pay, up to a statutory maximum.

The government has brought in a new law to ensure furloughed employees receive statutory redundancy pay based on their normal wages, not their reduced furlough rate.

The changes introduced will also apply to Statutory Notice Pay, which is the notice period employees are given before their employment ends which can range from one week to 12 weeks, depending on length of service. During this notice period, employees must be paid based on their normal wages.

Furthermore, new legislation also covers other employment rights that rely on average weekly pay, including unfair dismissal remedies, and short-time working.

Note there is no indication this new legislation has a retrospective effect.

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