United Kingdom: law to protect compensation paid to workers dismissed post-Covid

The editorial team is offering you free access to this article
Start your free 1-month trial to access all our content

The UK government passed an emergency law on 30 July stating that an employee that was furloughed (placed on partial unemployment) during the pandemic but is subsequently fired must receive severance pay that is based on their initial salary. While the majority of companies do this regardless, the government found that a minority of employers have calculated severance pay – paid in the UK in the case of people who have worked continuously for an employer for at least two years – on the basis of the furlough allowance, which is lower because it is limited to 80 per cent of salary up to a maximum of £2,500 per month. “We urge employers to do everything they can to avoid making redundancies, but where this is unavoidable it is important that employees receive the payments they are rightly entitled to,” says the UK Business Secretary Alok Sharma. This legislative change, effective as of 31 July and not retroactive, also applies to the calculation of Statutory Notice Pay, when an employee has been notified of his future dismissal, as well as to the calculation of compensation for unfair dismissal, for example. Some 12% of the working population still benefit from the government’s furlough scheme, the UK Office for National Statistics said on 20 August. While 150,000 people have already lost their jobs, this figure could jump to 1.2 million by Christmas, according to the think tank National Institute of Economic and Social Research.

Do you have information to share with us?
What you absolutely must read this week
The essential content of the week selected by the editorial team.
See all
United Kingdom largely retained within scope of EWCs despite Brexit, study shows
A study published this month by the Institute for Economic and Social Research, the French trade union research organisation, examined how the involvement of British representatives in European...
Spain: government approves creation of ‘intern status’
The Spanish government has paved the way for the creation of a new status for "persons undergoing non-professional practical training in companies, institutions or public or private organisations...
Luxembourg: two pension reform bills submitted to parliament
After lengthy negotiations with the social partners, in mid-October the Luxembourg government submitted two bills to parliament aimed at reforming the pension system to ensure its long-term...
Germany: pensioners in work already common practice, study shows
As the German government steps up measures to encourage people to stay in work beyond the legal retirement age, a new study by the Institute of Economic and Social Research (WSI) – an independent...
Most viewed articles of the month on mind HR
What readers clicked on the most last month.
What readers clicked on the most last month.
1
Italy: decree-law adopted to increase workplace safety
On 28 October, the Italian cabinet adopted a decree-law on health and safety at work, aimed at preventing and reducing accidents. The text addresses both the powers and actions of supervisory...
4 November 2025
2
Spain: already well on the way to pay transparency?
Spain is preparing for the implementation of its national law transposing the EU Pay Transparency Directive, which will take effect on 7 June 2026. The legislation marks another step forward in...
5 November 2025
3
Romania: parents of children with disabilities granted up to eight days of remote work per month
On 9 October, the Romanian parliament adopted a bill aiming to bolster support for parents of children with disabilities up to the age of 18. The legislation, which came into force on 12 October...
4
mind RH analysis – Initial findings from CSRD social indicators
In 2025, for the first time, the universal registration documents of major European companies contain the sustainability reporting required by the EU Corporate Sustainability Reporting Directive...
5
Italy: European pay transparency directive, a major step forward for businesses
Italy’s labour market continues to suffer from limited pay transparency and a persistent gender pay gap. The forthcoming implementation of the EU pay transparency directive — still awaiting...
6
Germany: EU pay transparency directive to force companies to ‘get tough’
Germany introduced a pay transparency law in 2017, meaning companies are already somewhat familiar with the issue. However, the broader scope and stricter requirements of the EU directive, the...
24 October 2025