Furloughed employees that have been made redundant will receive redundancy pay based on their full normal pay, under a new law passed on 30 July 2020.
This will protect employees financially, ensuring that they will receive a full pay package upon being made redundant rather than the wages that they received while on furlough pay.
By law, employees who have worked at a business for more than two years continuously will be entitled to statutory redundancy pay based on their age and pay.
Additionally, these changes will also apply to statutory notice pay, where an employee decides to leave the organisation voluntarily, by handing in their notice, which will increase from one week to 12 weeks. During this notice period, employees must be paid full pay, as opposed to furlough pay.
Alok Sharm, business secretary, said: “The government is doing everything it can to protect people’s incomes through our Coronavirus Job Retention Scheme, which is now supporting over 9 million jobs across the UK.
“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.
“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.”