Since 31 July, workers made redundant while on furlough are guaranteed redundancy pay based on their normal wage and not their furloughed salary, says UKFT, the trade body representing the retail drycleaning and fashion industries.

When a worker has been made redundant, they are entitled to a statutory notice period based on their length of service. A worker might be required to work this notice period or be paid in lieu of notice. In addition, provided a worker has two years’ service, they are entitled to a statutory redundancy payment, dependent on length of service, age and pay, for each full year they have been employed. 

Under the change, furloughed workers would also be entitled to statutory notice pay equivalent to their normal wages, and any future unfair dismissal cases would be based on their full wages rather than pay under the furlough scheme, which can in some cases be substantially lower than a worker’s contracted pay.

UKFT’s 10 points to consider when making redundancies
1. Only jobs are made redundant, not people.

2. The definition of redundancy is that there is “no longer a requirement for the job, or a diminution of the people required to do it” (i.e. the job has disappeared or it is spread among existing employees).

3. How many employees are affected? If there are 20 or more then there are minimum periods of consultation that must be followed.

4. All redundancies, even one, require consultation before any decision is made.

5. All consultation meetings (even by telephone or Zoom etc) should be witnessed and documented.

6. If a job is unique, ensure it can be proved to be unique. A unique job title would not be enough.

7. Decide on pool of workers from which selection will be made and ensure this pool can be defended as correct.

8. If selection is required (for example where more than one employee is doing the same job) ensure there is consultation on the selection and allow time to make changes to the selection criteria.

9. If some selection is done by marking, ensure there is no bias by having more than one marker with no collusion between markers.