Calculation of termination payments under employment rights legislation for employees who have been furloughed in Northern Ireland

New statutory rule provides for normal wage to be used in calculations in cases where an employee has received reduced wages while on furlough

New regulations have been issued in Northern Ireland in relation to the calculation of termination payments under employment rights legislation for employees who have been furloughed.

In force from 14 August 2020, the Employment Rights (Northern Ireland) Order 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations (Northern Ireland) 2020 (SR.No.178/2020) make amendments to the rules on how a week’s pay is calculated in the case of an employee who has been furloughed under the Coronavirus Job Retention Scheme (CJRS), for the purposes of calculating -

• any statutory remuneration for time off to look for employment or arrange training;
• any statutory notice payment;
• any statutory sum resulting from a failure to provide a written statement of reasons for dismissal;
• any statutory sum resulting from a failure to comply with an order for reinstatement or re-engagement;
• any statutory compensation for unfair dismissal; and
• any statutory redundancy payment.

Setting out the policy objectives of the changes, the explanatory memorandum to the new regulations advises that they -

‘... provide greater certainty in the calculation of a week’s pay and to ensure that furloughed employees do not lose out (as regards certain statutory entitlements which relate to termination of employment) by having been furloughed if their employment is terminated while, or shortly after having been, furloughed under the CJRS.'

SR.No.178/2020 is available from legislation.gov.uk