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Resignation during furlough - notice pay

Hi everyone,

i thought i had this absolutely clear in my head but I've just been questioned about it.......if an employee resigns whilst on furlough giving the statutory required notice period I believe they should be paid the notice period at 100% of normal pay and not at the reduced 80% furlough rate ......is this correct?

Thanks in advance.

1929 views
  • Hi
    If the notice had been given to the employer to the employee then would be payable at 100%. However, my thought is that as it is the employee giving notice then if they are currently on furlough and, if they had not given in their notice, would be remaining on furlough during the notice period then notice period is at the furlough rate of 80%.
  • In reply to Susan May:

    Hi Susan
    Thank you for your reply.....I see what you mean....I’ve just read conflicting advice on ACAS and gov.uk which says if it’s statutory notice given either way it should be paid at 100% ?? I don’t know what’s right now
  • In reply to Susan May:

    So this is the sentence from Acas that’s confusing me..... If they usually work fixed hours, they must be paid their full normal pay while they’re on statutory notice, not their reduced furlough rate. ......but as you say it’s not clear if thats when the notice is given by the employee to the employer.....?
  • Hi,

    We have been paying 100% for notice, as they can no longer serve notice on furlough.
  • Steve Bridger

    | 0 Posts

    Community Manager

    27 Jan, 2021 17:05

    Hi Amanda,

    Hmm... this has been one of the most frequently asked Qs over the last year, so lots of threads on this.

     quotes from the CIPD FAQs here

    For the sake of completeness... if the circumstance is redundancy (I know this isn't), the guidance is here (scroll down to 'Notice pay').

  • In reply to Steve Bridger:

    This ACAS guidance looks accurate:

    www.acas.org.uk/.../pay-during-the-notice-period

    So, if that bizarre ‘get out’ statutory provision about contractual notice entitlement from employer at least a week longer than statutory notice doesn’t apply, then someone on furlough who has resigned is  entitled to *statutory only* - ie one week only - at full normal pay and the rest of their notice period if it’s contractual and more than one week at the rate of pay they’re currently receiving, whether that’s SSP or reduced contractual sick pay or furlough pay or whatever.

  • Steve Bridger

    | 0 Posts

    Community Manager

    1 Feb, 2021 14:40

    In reply to Steve Bridger:

    OK, so we have now published a new FAQ on what happens to notice pay if someone resigns while on furlough (under pay during furlough FAQs)...

    Q: What happens with notice pay if someone resigns while they’re on furlough?

    If staff resign whilst they are on furlough the employer has to pay full normal salary pay and benefits for the length of the notice period.

    This position was not entirely clear under the earlier stages of the furlough scheme. However, UK Government guidance on the furlough scheme applicable from 1 December 2020 until 31 April 2021 clearly states that for furlough claims starting on or after 1 December 2020 employers cannot claim the furlough grant for any days during which the employee is serving contractual or statutory notice.

    If a furlough claim has been submitted but the employee then resigns (so is then on notice during what would otherwise have been furlough) employers will need to make an adjustment and pay back any furlough grant covering the days the employee is serving this contractual or statutory notice. 

    For any employees who served notice periods up to November 2020 employers could make a claim for furlough grant during the notice period, subject to some complexities. Employers can also make furloughed employees redundant, and claim furlough grants during a redundancy consultation process. Once the redundancy notice is served then the furlough grant is no longer payable during the notice period. Statutory redundancy and statutory notice pay are based on normal wages rather than the reduced furlough percentage.

  • In reply to Steve Bridger:

    Someone please correct me if I'm wrong Steve but on the face of it I don't understand the legal arguments for the assertion that "the employer has to pay full normal salary pay and benefits for the length of the notice period." - does it mean that the cost in these circumstances falls to the employer and / or that the employer must pay full normal pay to the employee during the employee's full contractual notice?
  • Steve Bridger

    | 0 Posts

    Community Manager

    1 Feb, 2021 16:04

    In reply to David:

    Hi David... as you said, if notice is contractual.

    This is also a good summary, I think.
    www.peoplemanagement.co.uk/.../notice-pay-for-employees-on-furlough
  • In reply to Steve Bridger:

    But that summary relates to redundant employees Steve - ie employees given notice of dismissal by employer - employees who've resigned aren't the same at all in this context- or under pre-Covid-laws never used to be as regards pay rights during notice of resignation!

  • Steve Bridger

    | 0 Posts

    Community Manager

    1 Feb, 2021 17:16

    In reply to David:

    Apologies - yes, I confused things with that PM link!
  • In reply to Steve Bridger:

    This I think says more or less what I was trying to say in previous post 4 days ago in this thread

    www.beswicks.com/.../