New law to ensure furloughed employees receive full redundancy payments
Northern Ireland Economy Minister Diane Dodds has announced a new law to ensure that furloughed employees who are made redundant receive statutory redundancy pay based on their normal wages, rather than a reduced furlough rate.
Employees with more than two years’ continuous service who are made redundant are usually entitled to a statutory redundancy payment that is based on length of service, age and pay, up to a statutory maximum.
These changes will also ensure that statutory notice pay is based on normal wages rather than their wages under the Coronavirus Job Retention Scheme (CJRS). Statutory notice pay must be paid when employees have been given a notice period before their employment ends, varying from at least one week’s notice up to 12 weeks’ notice.
Other changes will ensure that awards for unfair dismissal cases are based on full pay rather than wages under the CJRS.
This development will also ensure that statutory entitlements based on a week’s pay and connected with termination of employment are not reduced as a result of an employee being furloughed under the Coronavirus Job Retention Scheme. The entitlements are: redundancy pay, notice pay, compensation for unfair dismissal and a number of others. The legislation applies to basic statutory redundancy pay entitlements and does not impact upon any enhanced redundancy pay that may be stipulated in the terms and conditions of an employee’s individual employment contact.
This new law brings Northern Ireland into line with England, Scotland and Wales, where new laws were introduced on 31 July 2020.
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