Q&As

If an employee who is furloughed under the Coronavirus Job Retention Scheme (CJRS) has agreed (independently of the furlough agreement) to reduce their rate of pay, and is then given notice of termination, does their notice pay have to be calculated in accordance with the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020, SI 2020/814, or can it be paid at the agreed reduced rate of pay?

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Published on LexisPSL on 07/01/2021

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

  • If an employee who is furloughed under the Coronavirus Job Retention Scheme (CJRS) has agreed (independently of the furlough agreement) to reduce their rate of pay, and is then given notice of termination, does their notice pay have to be calculated in accordance with the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020, SI 2020/814, or can it be paid at the agreed reduced rate of pay?

If an employee who is furloughed under the Coronavirus Job Retention Scheme (CJRS) has agreed (independently of the furlough agreement) to reduce their rate of pay, and is then given notice of termination, does their notice pay have to be calculated in accordance with the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020, SI 2020/814, or can it be paid at the agreed reduced rate of pay?

For information on the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020 (Week’s Pay Amendment Regs 2020), SI 2020/814 generally, see Practice Note: Coronavirus Job Retention Scheme—right to statutory redundancy and other termination payments.

The Week’s Pay Amendment Regs 2020, SI 2020/814 set out how a week’s pay is to be calculated in the case of an employee ‘who is, or has been, furloughed’ under the CJRS, for the purpose of calculating certain payments, including the employee’s right to payment under section 88 or 89 of the Employment Rights Act 1996 (ERA 1996).

The Week’s Pay Amendment Regs 2020, SI 2020/814 only apply:

  1. in relation to an employee with normal working hours whose pay is not variable, where the calculation date is on or before 31 March 2021 (ie the last date in respect of which a claim under the CJRS can be made)

  2. in relation to an employee with normal working

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