Coronavirus Job Retention Scheme

Treasury written question – answered on 3rd September 2020.

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Photo of Mick Whitley Mick Whitley Labour, Birkenhead

To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of requiring employers who have furloughed employees through the Coronavirus Job Retention Scheme repay money to the Exchequer if they subsequently make redundancies.

Photo of Jesse Norman Jesse Norman The Financial Secretary to the Treasury

The Coronavirus Job Retention Scheme (CJRS) is designed to protect jobs, and it has protected 9 million jobs to date.

While employers who make redundancies do not need to repay the CJRS grant they have already received, if an employee is made redundant during the period of furlough then future grant payments in relation to that employee will cease.

Employees who are dismissed due to redundancy and who satisfy certain qualifying conditions are statutorily entitled to a lump sum redundancy payment from their employer, based on their age, length of service and contractual weekly earnings, subject to a statutory upper limit.

New legislation will ensure that employers base an employee's redundancy pay (and other statutory rights including notice pay and compensation for unfair dismissal) on their normal pay, rather than their furlough pay (potentially 80% of their normal wage). This will ensure that where someone who had previously been furloughed does lose their job, they will receive their full entitlements.

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