In UK employment law what are the differences between being furloughed, laid off, and made redundant?


Redundancy is a form of dismissal from employment — in other words, a permanent end to your employment. This is usually done if an employer needs to downsize, or if the job that you are employed for no longer exists. For example, if A runs a factory and decides to close it, the employees of that factory would likely be redundant. You are generally entitled to redundancy pay in this case.

In the UK, a lay off is asking an employee to stay at home or take unpaid leave when the employer does not have any work to give the employee. This is a temporary situation: your employment does not end, but you may not be paid as there is no work for you to do. A person who is laid off may be entitled to statutory guarantee pay.

A furlough is essentially the same thing as a lay off, although the term has become significantly more popular during the COVID-19 pandemic. Government guidance states that

If you and your employer both agree, your employer might be able to keep you on the payroll if they’re unable to operate or have no work for you to do because of coronavirus (COVID-19). This is known as being ‘on furlough’.

The government furlough scheme, the Coronavirus Job Retention Scheme, has brought the term to greater attention, and this offers 80% of an employee's wages while they are under furlough.

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