The government has announced that the Department for Business, Energy & Industrial Strategy is bringing in a new law to make sure all furloughed employees receive redundancy payments at 100% of their normal pay, rather than a reduced furlough rate. The law is said to come into force today.
At present, employees on regular fixed salaries get redundancy payments based on their normal wage as if they were working full hours (so 100% of normal pay), whereas employees with fluctuating hours/earnings get a payment based on the average of their last 12 weeks’ pay - which, if they have been furloughed, is likely to be less than 100%.
