New law launched today to ensure furloughed workers receive correct redundancy payments

Alok Sharma, Business Secretary announced new laws today to protect furloughed workers from receiving reduced redundancy payments based on their furlough salary, not their normal salary.

Some employers that have had to make redundancies have paid the full amount but many haven’t, and based redundancy payments on the furloughed salaries. This new law is set in place to ensure that workers get the full entitlement should they be in the unfortunate situation of being laid off.

Those people currently in the Coronavirus Job Retention Scheme are also covered.

The government furlough scheme pays 80% of peoples salaries to protect them during the crisis, but will end in October.

Mr Sharma stated “The Government is doing everything it can to protect people’s livelihoods and we are supporting more than nine million jobs through the Coronavirus Job Retention Scheme. 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. We urgently need targeted support for hard-hit industries, and extension of the furlough scheme beyond October for those who need it. Without this, we risk an avalanche of redundancies in the autumn and undermining the economic recovery”

TUC’s General Secretary Frances O’Grady’s statement on the ruling

Frances O'Grady
“People should get full redundancy pay, but the Government must be focused on stopping job losses in the first place. We urgently need targeted support for hard-hit industries, and extension of the furlough scheme beyond October for those who need it. Without this, we risk an avalanche of redundancies in the autumn and undermining the economic recovery.”

With redundancies being a last resort for employers, at least now employees will receive the full amounts they are entitled to and a figure based on 80% of their hard earned salaries.


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