At the end of July, the UK Government introduced legislation setting out how a ‘week’s pay’ should be calculated for employees who were furloughed under the Job Retention Scheme and who are then made redundant. This legislation is in force in England, Scotland and Wales from 31 July 2020 and does not have retrospective effect. It therefore only applies to payments and awards made on or after this date. Northern Ireland introduced similar legislation in August 2020.

Broadly, the legislation aims to ensure that furloughed employees entitled to certain statutory payments (including statutory redundancy and notice pay) receive payments based on their ‘normal’ wages rather than on their reduced furlough rate of pay.