Redundancy Payment for Furloughed Workers
The Government announced on 30th July 2020 that any furloughed worker, who is then made redundant, will have their statutory redundancy payment (“SRP”) calculated in accordance with their normal contractual wage and not their furloughed wage. This comes into effect from 31st July 2020. Read more here.
What does this mean to you?
The Government have written into law that the SRPs for employees on furlough leave and who are then made redundant, are based on 100% of either the employee’s fixed salary, if they have one, or 100% of the average of their hours worked, pre-furlough.
Whilst you may have expected to calculate the SRP for employees on their fixed salary as if they were working their usual contractual hours, you may have been hoping that the SRPs for those working on flexible hours, could be calculated using their recent average and therefore take furlough pay into account. This will not be the case. Instead for employees whose hours vary, employers will need to look at the average earnings pre-furlough, over a reference period, in this case 12 weeks, and use that weekly wage to calculate the SRP.
Are you considering making redundancies?
At Tollers we have an experienced team of employment lawyers who can guide you through a redundancy process in a cost effective manner to suit your budget. We know that financial considerations are key at the moment.
We have a useful toolkit, called Redundancy Manager, which we can offer, for a fixed price, to help you navigate the redundancy process. It’s tried and tested, to find out more, please contact us.
The Firm also have the Tollers HR product, which in this current climate, we are pleased can give peace of mind, for 12 months, in dealing with staff at a fixed cost, which is insured and can be budgeted for. https://www.tollers.co.uk/employment-law-solicitors/tollers-hr/.
For more information regarding the payments of SSP or the calculation of SRPs, the changes in regard to redundancy payment and for all your employment and legal HR requirements… talk to Tollers on 01604 258558 and the Employment team will be happy to assist and guide you through.