Q&As

Can a settlement agreement provide for an employee to be placed on furlough under the Coronavirus Job Retention Scheme (CJRS) for three months, during which time their salary will be funded by a CJRS grant, and to be paid a statutory redundancy payment at the end of that period?

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Published on LexisPSL on 10/07/2020

The following Employment Q&A provides comprehensive and up to date legal information covering:

  • Can a settlement agreement provide for an employee to be placed on furlough under the Coronavirus Job Retention Scheme (CJRS) for three months, during which time their salary will be funded by a CJRS grant, and to be paid a statutory redundancy payment at the end of that period?

For information generally on the situation where an employer enters into a settlement agreement before termination that provides for the employee to be placed on garden leave during their notice period, see Practice Note: Settlement agreements in employment—practical and tax issues—Garden leave and reaffirmation (two-stage settlement).

An employee whose employment is terminated by reason of redundancy will be entitled to receive their contractual notice entitlement (or their statutory entitlement, if longer) and a statutory redundancy payment calculated on the basis of their age, length of service and gross weekly pay (capped at the rate of £538 per week from 6 April 2020). See Practice Notes:

  1. Entitlement to statutory redundancy payment

  2. Contractual notice

  3. Statutory minimum notice

For information on the Coronavirus Job Retention Scheme (CJRS) generally, see Practice Notes:

  1. Coronavirus Job Retention Scheme (original version to 30 June 2020)

  2. Coronavirus Job Retention Scheme (revised version 1 July to 31 October 2020)

Note that the original CJRS scheme closed on 30 June 2020. The revised CJRS is only available in respect of an employee who has been furloughed for a full t

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