Furlough and redundancy
Updated 22 October 2021
Applies to England, Scotland and Wales
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This publication is available at https://www.gov.uk/government/publications/furlough-and-redundancy/furlough-and-redundancy
This guidance is for employees who were on furlough using the Coronavirus Job Retention Scheme (CJRS), then made redundant because their employer is now insolvent.
The CJRS (also known as the job support scheme) ended on 30 September 2021.
1. Who is eligible
You may be eligible to apply for payments from the Insolvency Service if you were put on furlough and then made redundant because your employer is now insolvent.
You cannot apply to the Insolvency Service if you have been dismissed then re-employed under the job support scheme. The Insolvency Service can only make payments to employees who have been dismissed by their employers without being re-employed.
If your circumstances change in future and you are dismissed, you can reapply to the Insolvency Service using our online application.
You can find out more about your rights as an employee put on furlough.
2. Your rights when you’re made redundant
You have certain rights when you’re made redundant. These include getting redundancy pay, a paid notice period and any money your employer owes you (for example, unpaid wages). You still have these rights even though you were put on furlough when you were made redundant.
You can apply online for redundancy pay and other money you are owed. You will need a case reference number (starting CN) to begin your claim. You will get this from the insolvency practitioner dealing with your employer’s insolvency. If you do not have a CN reference number, please contact the insolvency practitioner.
3. What you can apply for
3.1 Redundancy pay
You can apply for redundancy pay if you have worked for your employer for 2 years or more. The 2 year qualification period includes time you were put on furlough.
For example, if you worked for your employer for one year and 11 months and then you were put on furlough for one month, you will have been employed for 2 years and are eligible for redundancy pay.
3.2 Holiday pay
You can apply for:
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days you have accrued but not used so far during your current annual leave year. If you’re only part way through your annual leave year we cannot pay you your full yearly holiday entitlement. You continue to accrue holiday entitlement while on furlough and your employer can ask you to take holiday, while on furlough
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holiday you have already taken but not been paid for
Holidays must have been paid at your full salary. This means that your employer must have topped up your furlough pay. Days off that you received furlough pay for (rather than your full salary) do not count against your annual leave entitlement. You can claim these as holiday pay.
3.3 Money you’re owed by your employer
You may be eligible for other payments such as unpaid wages, overtime and commission that you have not been paid.
You should have been paid 80% of your monthly wage, up to £2,500 a month on the CJRS scheme. If you were paid this amount, we cannot pay you the difference between your furlough pay and your full salary.
Some of this amount will have been paid by your employer for:
- September 2020 (70% CJRS and 10% employer)
- October 2020 (60% CJRS and 20% employer)
- July 2021 (70% CJRS and 10% employer)
- August 2021 (60% CJRS and 20% employer)
- September 2021 (60% CJRS and 20% employer)
During these months, the CJRS scheme paid either 60% (up to £1,875) or 70% (up to £2,187.50) of your monthly wage. If your employer did not top up your pay to match your previous furlough pay, you can apply for the amount your employer should have paid when you make a claim for redundancy payments. If you are owed this payment, include it in the ‘Wages and other money owed’ section of the online claim.
3.4 Notice pay
If you were not given notice before being made redundant you can apply for notice pay as long as you have worked for your employer for at least one month.
4. Rate of pay
When you apply for redundancy pay you will be asked about your rate of pay. Rate of pay is based on your weekly pay and is what we use to calculate your payments.
Find out how we calculate your rate of pay if you weren’t paid weekly.
Please provide your pre-furlough salary, rather than the reduced salary you may have earned while you were put on furlough.
We will calculate most of your payments based on your full salary rather than your earnings while on furlough.
5. Protective awards
If you were not consulted prior to being made redundant, you may be entitled to a compensation payment called a protective award. To get a protective award, you have to make a claim to an employment tribunal.
You can make an employment tribunal claim online.
Our online guidance explains more about protective awards.
6. Limits on how much we can pay
There are limits to how much we can pay for each type of payment. These caps are different to the caps within the CJRS.
If you are owed more than the maximum we can pay, you can register as a creditor in the insolvency for any outstanding money you’re owed.
7. Additional information
If you have any questions, please check our online guidance for more information about the redundancy payments process.