Furloughed employees entitled to full pay for redundancy purposes
The government has brought in new legislation to ensure that any employees who have been furloughed will have their statutory redundancy pay calculated based on their full-time wages as opposed their furloughed pay in the event that they are made redundant.
Please note: the information contained in this legal update is correct as of the original date of publication.
The government has brought in new legislation to ensure that any employees who have been furloughed will have their statutory redundancy pay calculated based on their full-time wages as opposed their furloughed pay in the event that they are made redundant.
Employees with more than two years’ continuous service are entitled to receive a statutory redundancy pay which is calculated based on their length of service, pay and age, subject to certain statutory caps. For those individuals who have been furloughed under the CJRS, some employers have been choosing to base those calculations on the current pay that employees are receiving under the CJRS (80% of normal pay) as opposed to the full-time pay they would have been receiving had they not been furloughed. This new legislation puts a stop to that and ensures that employees will receive their full statutory entitlement.
This legislation only covers statutory redundancy pay, not any enhanced contractual redundancy pay that employers may offer. The question of whether or not enhanced redundancy pay can be paid at the lower CJRS rate or needs to be increased to the full-time salary will largely depend on the specific wording of an employer’s redundancy policy and we would advise you to take specific advice on this before proceeding with any enhanced redundancy payments.
The legislation also dictates several other entitlements that must be calculated on full-pay as opposed to the CJRS pay as part of the redundancy process, including:
- any period of absence to look for new employment once notice of termination is given;
- notice pay where the statutory minimum notice period provisions apply;
- any claim for failure to provide written particulars of the reasons for dismissal;
- failure of an employer to comply with an order for re-instatement or re-engagement; and
- the basic award in a claim for unfair dismissal.
Contact
Mark Hickson
Head of Business Development
onlineteaminbox@brownejacobson.com
+44 (0)370 270 6000
Related expertise
You may be interested in...
Legal Update
Employment Healthcare Briefing: December 2024
Legal Update
Employment Rights Bill: Will it cost more to outsource public services and back-office functions?
Legal Update
Navigating workplace sexual harassment laws during the festive season
Legal Update
Navigating the new 'Failure to Prevent Fraud' Offence: What organisations need to know
On-Demand
Managing safeguarding allegations against staff
Opinion
Revolutionising the Workforce: Impact of Get Britain Working White Paper
Legal Update
Supreme Court shines a light on collective agreements
Press Release
Browne Jacobson advises Celtic Freeport as it opens for business
In Person Event
Ascensus and O Shaped workshop: Ethics in the spotlight
Legal Update
What’s in a name: ESG principles and UK local authorities
Opinion
Balancing employer flexibility and employee rights
Legal Update
Right to work update: eVisas
Legal Update
How the Data (Use and Access) Bill will impact the public sector
Opinion
Empowering your workforce: Key tips on adjustments for new starters
On-Demand
Shaping a culture of respect and safety: Preventing sexual harassment in our schools
Legal Update
Top five takeaways for schools on the Employment Rights Bill
Legal Update
Building an inclusive workplace: Strategies for attracting and retaining disabled talent
On-Demand
How schools can grapple with new employment law to thrive in a new era
Press Release
Browne Jacobson advises The Jordon Group on transformative merger
Press Release
Browne Jacobson advises UK’s leading fire protection specialist on key acquisition
Press Release
Browne Jacobson advises IT solutions specialist on sale to Goldman Sachs-backed international digital transformation provider
Online Event
EdCon 2025
Legal Update
Breaking the glass ceiling: Empowering female leadership in the food and drink sector
Legal Update - Employment Rights Bill
What does the Employment Rights Bill mean for employment practices liability insurance?
Opinion - Employment Rights Bill
Beyond the Bill: Exploring the horizon of new employment rights and proposed measures
Legal Update - Employment Rights Bill
Labour’s employment law reforms: Employment Rights Bill unveiled
Legal Update
Expanding the role of school attendance mentors
Press Release
Browne Jacobson advises UK climbing operator on sale to Belgian investment firm
Legal Update
Organisational approaches to ESG and sustainability matters
Legal Update
Balancing acts: Navigating the complex risks in adult social care provision
Legal Update
What the UK Covid-19 Inquiry means for higher education providers
Opinion
New anticipatory duty to prevent sexual harassment at work: final EHRC guidance published
Opinion
Employment tribunal case shines light on mistaken customer communications
Press Release
Browne Jacobson launches new HR services offering in health and social care
Press Release
Browne Jacobson and CBI roundtable explores how to finance public infrastructure post-PFI
Opinion
Navigating the new norms of flexible working and reasonable adjustments
Legal Update
Hybrid working, the right to flexible working and how to make it work for public sector employers
Press Release
Comments on the publication of Universities UK’s (UUK) report
Press Release
An interview with HSBC’s ex-commercial manager
