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Calculating a week's pay for furloughed employees

Posted 30/04/2021 by Amy Patterson

The Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) (Amendment) (No. 2) Regulations 2021 will come into force on 30 April 2021. Following the extension of the Coronavirus Job Retention Scheme (CJRS) to 30 September 2021, the regulations provide that the modified calculation of a “week’s pay” for the purposes of calculating statutory redundancy pay and statutory notice pay in relation to employees who are furloughed under the CJRS, as set out in the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020, will continue to apply throughout the extension of the CJRS. This means that employees’ statutory redundancy and notice pay is to continue to be calculated by reference to their normal full week’s pay, not their furlough pay, where the calculation date falls on or before 30 September 2021.

In addition to statutory redundancy and notice payments, the regulations continue to cover certain other statutory rights for furloughed employees that depend upon calculating a “week’s pay”, i.e.:

  • compensation for failure to provide a written statement of reasons for dismissal
  • unfair dismissal compensation
  • compensation for failure to comply with an order for reinstatement or re-engagement
  • remuneration for time off to look for employment or arrange training
  • the assessment of whether an employee is to be taken to be on short time working for statutory purposes.

If you have any questions about the furlough scheme we have a payroll team on hand to help. Get in touch with your usual Farnell Clarke contact or email hello@farnellclarke.co.uk.

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