If job goes post COVID, will redundancy and notice pay be on full salary or 80% furlough pay?

Q:  I have been on furlough since COVID lockdown started but am worried that my job may cease to exist when the job retention scheme ends. If I am made redundant, will my redundancy pay be based on my previous salary or on the 80% furlough pay? Secondly, will the notice pay be 100% or 80%?

A:  The government has advised that any redundancy payments should be calculated using 100% of salary prior to furlough. If this is not the case and your employer disregards the government’s recommendation on redundancy following furlough, he or she could find themselves risking being taken to an employment tribunal.

In respect of notice pay, this is a little less straightforward. Primarily it will depend on whether you are entitled to statutory notice or contractual notice. Statutory notice is the minimum legal notice that can be given. For employees who have worked continuously for one month or more but for less than two years, this is one week. For employees who have worked continuously for more than two years it is two weeks plus an additional week for each further year of continuous employment, up to 12 weeks maximum. Contractual notice is the amount of notice set out by the employer in the terms and conditions of employment, and which can be longer than the statutory notice.

If you are entitled to statutory notice, your notice pay should be based on 100% of salary prior to furlough. Contractual notice pay however, will depend on the terms of your furlough agreement if your contract provides for one or more weeks over and above the statutory notice. When and if the time comes, if you have concerns you should seek advice from a specialist employment solicitor.

Article 29/06/2020

This question has been answered by Robert Williams a Partner with GHP Legal.  If you would like to speak to someone about this or any other legal matter it is still possible and we are doing everything we can to ensure that we continue to offer our high levels of service to our clients.  In accordance with government guidelines, most of our lawyers are currently working remotely which means you may not now receive a response as promptly as you may expect. Please kindly bear with us and we will respond as soon as we are able.

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