Furlough and redundancy: How is redundancy affected if you are on furlough?

The furlough scheme was devised by the Government in a bid to protect workers from being made redundant during the coronavirus crisis. However, despite this more than two million people are estimated to have lost their jobs as a result of the pandemic. But can you be made redundant while on furlough?

The Government launched its Coronavirus Job Retention Scheme earlier this year in a bid to safeguard workers from being laid off.

The scheme sees the Government offer a grant for 80 percent of an employee’s salary to employers.

The grant, up to £2,5000 a month excluding National Insurance and pension contributions, is available until the end of July.

After this time, the Chancellor of the Exchequer Rishi Sunak has said he will ask workers to return part-time and ask employers to cover a portion of the salary cost.


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Can you be made redundant while on furlough?

Furlough is an official designation for workers.

Furlough is temporary leave for employees due to the special needs of a company or employer.

In the current climate, this is due to the coronavirus pandemic which has forced several businesses to close and prevented many people from working.

Importantly, furloughed workers are not permitted to undertake work for their company while on furlough, but have not been made redundant.

The scheme was designed as a means to prevent unemployment skyrocketing during lockdown and in the aftermath of the coronavirus crisis.

Being on furlough does not protect you against being made redundant, however, you should be aware of your rights to ensure you are not illegally made redundant.

If you are being made redundant, you might be eligible for certain things including:

  • Redundancy pay
  • A notice period
  • A consultation with your employer
  • The option to move into a different job
  • Time off to find a new position.

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You should be consulted on redundancy before you are laid off and should receive statutory redundancy pay if you have worked somewhere for at least two years.

Statutory redundancy pay is as follows:

  • Half a week’s pay for each full year for those aged under 22
  • One week’s pay for each full year for those aged 22 to 41
  • One and half week’s pay for each full year for those aged 41 and over.

You must be selected to redundancy in a far and object way.

The most common methods used are:

  • Employees with the shortest length of employment are selected for redundancy first
  • Asking for volunteers to take redundancy
  • Using disciplinary records
  • Using staff appraisal markings, skills, qualifications and experience.

An employer is entitled to make you redundant without adhering to these guidelines if your job no longer exists.

During the coronavirus period, your employer might be able to re-employ you and pay 80 percent of your wage using the furlough scheme.

If you were made redundant or stopped working for your employer after February 28, 2020, you can ask to be re-employed and placed on furlough.

If you were made redundant or stopped working for your employer after March 19, 2020, your employer can agree to re-employ you and place you on furlough.

But for both you must have been put on their payroll, meaning an RTI submission notifying payment in respect of you to HMRC was made, by March 19.

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