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Resignation during furlough - notice pay

Amanda Jane Roberts

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.

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  • Hi Amanda,

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

    Keith 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

    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?
  • 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!

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