The UK government has brought in a new law to ensure that furloughed workers who lose their jobs will receive full redundancy payments, based on their normal wages, from Friday.
Workers who have been in a job for more than two years, are usually entitled to a statutory redundancy payment based on length of service, age and pay, up to a statutory maximum.
However, throughout the pandemic a minority of businesses have taken advantage of the crisis and have calculated redundancy payments based on the government’s furlough rates.
The latest figures show that there are currently 9.5 million employees being paid 80 percent of their wages through the furlough scheme, which has cost the Treasury £31.7 billion so far.
Business Secretary Alok Sharma said that the government is urging employers to do everything it can to avoid making redundancies, but where this is unavoidable to make sure that workers receive the payments they are entitled to.
“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,” he said.
The Government has announced that from 31 July, #furloughed employees will be entitled to receive #redundancy payments at 100% of their normal pay, rather than at a reduced furlough rate (1)...#ukemplaw #HR #employmentlaw #employees #Redundancy #workers #staff #jobs pic.twitter.com/Sm1qnHYmQR
— Blandy & Blandy Solicitors (@BlandyBlandyLLP) July 30, 2020
The new laws will also apply to Statutory Notice Pay, which is when employees must be given a notice period before their employment ends. This can vary from one week to 12 weeks depending on how long they have been in their job and they must be paid during this notice period.
Other changes will also ensure that employees who have been dismissed unfairly will receive their full wages rather than redundancy pay.
The government has also introduced a Job Retention Bonus in an effort to encourage employers to keep on furloughed workers. Employers are now being offered £1000 for every worker they bring back from furlough and employ through to January next year.
