Furloughed workers at risk of redundancy received a boost as the Government's Job Retention Scheme was extended.
Business leaders feared thousands of staff may be warned they could be made redundant on Monday unless the Government's furlough scheme was rapidly extended.
Large businesses could have had to start consulting on sweeping layoffs under rules that force them to begin the process a month and a half before making staff redundant.
The Government's furlough scheme was set to come to an end on May 31.
But Chancellor Rishi Sunak extended it by a month, meaning it is open until the end of June – providing businesses with the certainty they need.
He said: "It is vital for people’s livelihoods that the UK economy gets up and running again when it is safe to do so, and I will continue to review the scheme so it is supporting our recovery.”
Before the extension announcement, the Prime Minister's spokesman said: “We do recognise that by law redundancies require a consultation period of a minimum of 45 days for companies with more than 100 employees and 30 days for those with fewer than 100 employees.
“If the Job Retention Scheme is extended, any negotiations that were underway would be paused and the furlough period of those employees would continue.”
It comes after the Confederation of British Industry warned that companies could be forced into a position where they have to make people permanently redundant if the scheme wasn't suspended.
It said that if bosses were to comply with the law regarding the minimum 45-day consultation period required for redundancies for companies with more than 100 employees, then they will need to start those procedures Saturday.
The government initially said that its furlough scheme will run for three months, up to 1 June.
The scheme pays 80% of an employee’s monthly salary up to a cap of £2,500.
Earlier this week CBI director-general Carolyn Fairbairn told the BBC Today programme: “What we are saying to government is that firms need to be able to plan.
“These are massive decisions being taken on a day-to-day basis that affect people’s lives and livelihoods, and having that clarity of a 45-day notice period for business is absolutely vital.”
