Furloughed workers who lose their jobs will receive redundancy pay based on their normal wage under new laws being brought in on Thursday.

Ministers said the move will ensure that furloughed employees receive statutory redundancy pay based on their normal wages rather than a reduced furlough rate.

The changes will mean those furloughed under the Coronavirus Job Retention Scheme are not short-changed if they are made redundant, the Government said.

Ministers said the changes will also apply to statutory notice pay and other entitlements, providing some reassurance “during this difficult time”.

The furlough scheme has protected the jobs of millions of workers, with the Government paying 80% of their salary, but it is being wound down from August and stopped altogether in October.

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

The Government said that throughout the pandemic it has urged businesses to pay those being made redundant based on their normal wage rather than their furlough pay, which is often less.

Most businesses have done so but there are a minority who have not, Business Secretary Alok Sharma said.

He added: “The Government is doing everything it can to protect people’s livelihoods and we are supporting more than nine million jobs through the Coronavirus Job Retention Scheme.

“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.

“New laws will ensure furloughed employees are not short-changed and are paid their full redundancy pay entitlement – providing some reassurance in an undeniably testing time.”

We urgently need targeted support for hard-hit industries, and extension of the furlough scheme beyond October for those who need it. Without this, we risk an avalanche of redundancies in the autumn and undermining the economic recovery

Other changes coming into force will ensure basic awards for unfair dismissal cases are based on full pay rather than wages under the scheme.

TUC general secretary Frances O’Grady said: “People should get full redundancy pay, but the Government must be focused on stopping job losses in the first place.

“We urgently need targeted support for hard-hit industries, and extension of the furlough scheme beyond October for those who need it.

“Without this, we risk an avalanche of redundancies in the autumn and undermining the economic recovery.”