Since the introduction of the Government’s Coronavirus Job Retention Scheme, there has been uncertainty as to how redundancy pay should be calculated for those employees who qualify and are on furlough. However, the Government has moved to end this uncertainty and announced that a new law will come into force today (Friday 31 July 2020) to ensure that all qualifying furloughed employees receive statutory redundancy pay calculated at 100% of their normal (pre-furlough) pay, and not at a reduced furlough rate. The same position will also apply to other statutory employment rights that are based on the calculation of “a week’s pay”, such as notice pay (but not any enhanced notice payments).
The Government has published details of this via the following link: https://www.gov.uk/government/news/new-law-to-ensure-furloughed-employees-receive-full-redundancy-payments.
Further, for those interested, this law is contained in The Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020, and can be found here: https://www.legislation.gov.uk/uksi/2020/814/contents/made.