S1E49 - Notice Pay while on Furlough

Employers are entitled to give notice of termination (whether on grounds of redundancy, or otherwise) to employees who are on furlough.  Salary payments made by the employer during furlough can still be reclaimed from HMRC (subject to the limits of the Coronavirus Job Retention Scheme), despite the employee working out notice.

An unresolved issue is: if employees have agreed to accept 80% of their salary while on furlough, is their notice pay also paid at 80%, or does it revert by operation of law to 100%?  Remarkably little has been written on this, in part because such a simple question entails an extremely complex analysis, and in part because even with that analysis, the answer remains opaque.  

This podcast argues that despite the established statutory rules, which lead to the answer ‘it depends’, a court or tribunal would strain to ensure that an employee receives 100% of their normal pay during notice period – even if they have agreed to accept 80% - and there are a number of devices a court could use to achieve that outcome.

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