Furloughed staff who are axed will receive redundancy pay based on their normal wage under new laws as of today (Jul 30).
It means they won’t be short-changed by having their settlement based on their reduced furlough rate.
Ministers said the changes will also apply to statutory notice pay and other entitlements, giving some reassurance ‘during this difficult time’.
The furlough scheme has protected the jobs of millions of workers, with the government paying 80 per cent of their salary, but it is being wound down from August and halted in October.
The government said that throughout the pandemic it had urged businesses to base people’s redundancy pay on their normal wage rather than their furlough pay, the latter of which which was often less. Lawgistics said the full rate was applicable when it appeared on Car Dealer Live on July 13.
Although most businesses had done so a minority hadn’t, said business secretary Alok Sharma.
He added: ‘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.
‘New laws will ensure furloughed employees are not short-changed and are paid their full redundancy pay entitlement – providing some reassurance in an undeniably testing time.’
Other measures will guarantee basic awards for unfair dismissal cases are based on full pay rather than furlough wages.
TUC general secretary Frances O’Grady said: ‘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.’
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