Redundancy Pay when furlough is higher than basic salary.

kayjaybee_3

Hi, my husband has a 24hpw contract but until Covid invariably did 40h as a minimum. This has resulted in his furlough pay average at 80% being higher than his basic pay.  Unusual, but nice. He is now being made redundant and his employer is calculating his redundancy based on his basic contract, whereas I thought it had to be based on his current 12 week average. Is that just wishful thinking on my part? I thought I read it somewhere... You cannot trust his emoplyer at all, so need to be sure of facts before he goes for next meeting.  Thanks all.

Jeremy535897

The problem with using a 12 week average for most people on a fixed rate of pay but furloughed at 80% is that their statutory redundancy falls. To correct this, the Government announced a change to the law from 31 July, saying that statutory redundancy must be calculated based on "normal" pay. See https://www.gov.uk/government/news/new-law-to-ensure-furloughed-employees-receive-full-redundancy-payments

The statutory redundancy calculator has been amended to reflect this. See https://www.gov.uk/calculate-your-redundancy-pay

Some more detail here: https://www.lewissilkin.com/en/insights/new-law-on-redundancy-and-notice-pay-for-furloughed-employees . The legislation is at https://www.legislation.gov.uk/uksi/2020/814/part/2/made

I confess to struggling with the impact on your husband's case. I think what the legislation means (paragraph 5 is in point) is that the effective rate of pay per hour used for the average takes into account the actual hours worked (while not on furlough) rather than the 24 hours, but it could be a lot clearer.