Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, whether he has issued guidance on the implications for the calculation of statutory redundancy pay of being placed on reduced pay in a furlough agreement under the Coronavirus Job Retention Scheme and then made redundant; and if he will make a statement.

Any employee who is dismissed due to redundancy and who satisfies certain qualifying conditions has a statutory entitlement to a lump sum from their employer, based on their age, length of service and contractual weekly earnings, subject to a statutory upper limit, payable at, or soon after, the dismissal date.

The Government introduced new legislation which commenced on 31 July to ensure that furloughed employees who are subsequently made redundant receive statutory redundancy pay based on the employee’s normal pay, rather than their furlough pay (potentially 80% of their normal wage). The Government issued guidance on these changes which can be found on the Acas website at: https://www.acas.org.uk/manage-staff-redundancies/work-out-redundancy-pay.

The Government has always urged employers to do the right thing and not seek to disadvantage furloughed employees who are facing redundancy. We are aware that most companies will do this and we have now underpinned these expectations with additional statutory protections.