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31st July 2020

Job Retention Scheme Update (31 July)

As we move towards the end of CJRS and the relaxation of lockdown, the Government yesterday announced the latest update on how employers should be handling their employees in these difficult times.  Sadly the focus of the announcement is on redundancy and that recognises an increasing trend of employers having to make difficult decisions following months of disruption to normal business.

While the detail of the new legislation may well cause some practical difficulty down the line, the headline announcement is that it is now a legal requirement for an employer to ensure that employees’ statutory redundancy pay is calculated on the basis of their full contractual pay (for many this will date back to pre-lockdown), not using their reduced furlough pay.

At a time when many employees face redundancy, it seems the Government has made a decision to remove any doubt in this area and to make sure that employees do not suffer any more financial penalty by being paid a reduced statutory redundancy payment.

All employees dismissed on or after 30 July are covered by this change.  For employers, this provides certainty on budgets as it remains the case that the cost of redundancy payments cannot be claimed back using the CJRS and are paid by the employer alone.

If you have any questions on any of the issues mentioned in the above article, please contact Russell Eadie.

31st July 2020