Redundancy rights of furloughed workers to be protected

Furloughed workers who are made redundant will be eligible for redundancy pay based on their previous salary, not the furlough rate, the UK Government has confirmed.

Business Secretary Alok Sharma confirmed that the rule would apply from today (31 July). As from 1 August, businesses will have to restart paying national insurance and pension contributions for furloughed workers, and in September and October an increasing proportion of their salaries.

The furlough scheme ends in October and it is feared that many workers will be made redundant rather than being brought back into their business.

Employees with more than two years’ continuous service who are made redundant are normally entitled to a redundancy payment based on length of service, age and pay, up to a statutory maximum.

The new rules will also apply to statutory notice pay.

An estimated 150,000 people have so far been made redundant during the pandemic.

Mr Sharma commented: "New laws will ensure furloughed employees are not short-changed and are paid their full redundancy pay entitlement – providing some reassurance in an undeniably testing time."