July 8, 2020
During the week commencing 29 June 2020, mass job losses were announced by large employers such as Café Rouge, Airbus, EasyJet and Upper Crust. There are concerns that many employers will be looking to time redundancies before the end of the furlough scheme (31 October 2020) to make the most of the scheme.
If you anticipate a long-term downturn in work and/or that certain parts of your business are no longer viable, you should consider the following:
Whether there are alternatives to redundancy
If redundancies cannot be avoided, review your Redundancy Policy to see whether you have to follow a particular procedure or offer enhanced redundancy pay.
Inform and consult with your staff about the proposed redundancies. Remember you have a duty to collectively consult your employees at least 30 days prior to the first dismissal if you are making 20 or more redundancies in a 90-day period or less, or 45 days where 100 or more redundancies are proposed.
Given social distancing requirements, it is unlikely that you will be able to conduct consultations in person, and therefore you should consider conducting these remotely. Even if these meetings are conducted remotely, an employee’s rights, such as the right to be accompanied, still stand.
At the beginning of any consultation meeting, ensure you clearly explain that you will take notes of the meeting and circulate them afterwards. Be clear that covertly recording a meeting could amount to misconduct under your Disciplinary Policy, which could lead to disciplinary action.
Make sure you have fair and objective selection criteria and that you score employees with reference to that criteria. You should avoid selecting employees for redundancy on the basis of factors which could be discriminatory. For example, you should avoid simply picking furloughed staff for redundancy if many of those are furloughed because they are clinically vulnerable, shielding, or have a dependant.
It may be worth asking your staff whether anyone is willing to volunteer for redundancy first as this could reduce the number of compulsory redundancies you would have to make.
Remember that employees who have 2 years’ continuous employment will be entitled to a statutory redundancy payment. Any time spent on furlough leave will count towards their continuous service.
Be careful about getting the process right. Employment Tribunals can make a “protective award” of up to 90 days’ pay per affected employee if you fail to meet the necessary requirements to collectively consult. You could also be faced with unfair dismissal claims from employees who have 2 or more years’ service, and even if the redundancy is a fair reason for dismissal, dismissals can still be unfair if the correct procedure is not followed.
Even during non-pandemic times, the redundancy process is stressful for everyone involved, so make sure you handle the situation with clarity and sensitivity. Many employees will be grateful for the offer of counselling services, professional medical help, employee support helplines, and/or useful wellbeing resources to help them through this challenging period.
