30th July 2020

Furloughed staff and redundancy payments

As the furlough scheme tapering approaches, we are finding that increasing numbers of employers are assessing their finances and are starting redundancy processes.

A common questing we are getting is “do we calculate statutory redundancy payments and statutory notice pay for redundant employees using their normal or furloughed pay?”

This question has been answered by the Government today with an announcement (click here) that new legislation is going to be brought in today which obliges employers to calculate the statutory redundancy payments (which includes redundancy pay and statutory notice pay) for furloughed staff on the basis of their full usual pay, rather than any agreed reduced furloughed rate.

Employers should also note that the cost of redundancy payments (both statutory and contractual) cannot be included in a claim for the Coronavirus Job Retention Scheme grant: this is a cost that must wholly be borne by the employer.

Need advice on how to deal with making redundancies or changing terms and conditions, we’re here to help – get in touch.

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