Redundancy After Lockdown

It has been reported that more than a quarter of the UK workforce is currently furloughed and is being supported by the Coronavirus Job Retention Scheme (CJRS).  From 1 July, furloughed employees can return to work on a part time basis under the CJRS and from 1 August, employers are required to pay a contribution towards furloughed employees’ wages.  This amount will increase in September and October.  Inevitably, some employers will turn their minds to potential redundancies as the CJRS changes.  Many have already started the process.

Our employment team are therefore today launching a mini-series of alerts focusing specifically on redundancies and highlighting key issues that employers need to be aware of in order to get it right.  In the first instalment, we have set out an overview of the redundancy process with some key issues to consider.  More detail on specific issues will follow later in the series.

Redundancy After Lockdown – Issues for Employers

Across the UK, employers have faced many challenges as a result of lockdown.  Some have had to close their businesses entirely; some have been able to continue in part.  Working arrangements are likely to be disrupted for some time and employers are going to need to be flexible while the UK eases out of lockdown.

Some employers might decide that parts of the business are no longer viable, or they might face a slow return to being fully operational. A restructure and/or changes to terms and conditions of employment may be required.  Inevitably some employers will need to consider making redundancies, and it is important that this is implemented correctly to avoid employment tribunal claims.

Is there a redundancy situation?

An employer must first be satisfied that there is a genuine redundancy situation.  In law, such situations include business closure, workplace closure and reduced requirements for employees to carry out a particular type of work.  Dismissals for reasons such as conduct or performance should not be “dressed up” as redundancy – any such issues should be managed in the usual way.

Follow a fair procedure

In a redundancy situation one of the first things to consider is the numbers affected, to determine whether the collective redundancy consultation requirements apply.  There are specific timescales for this, and we will cover this in more detail later in this series.

In addition to those extra requirements, employers should also check whether they have any contractual redundancy procedures in place and in any event must follow a fair procedure, including individual consultation.  This will normally include warning and consulting with employees, implementing a fair selection for redundancy and considering suitable alternative employment.

There is no statutory step by step guide to dealing with redundancy situations fairly, and the procedure will vary depending upon each situation.  The process will however include several meetings with employees, follow ups, scoring (in some cases) and the right to appeal.  During consultation, this is a chance to consider alternatives to redundancy and the employer should follow up on any suggestions made by an employee during this process.  Redundancy should not be seen as a foregone conclusion, employers should approach it with an open mind and a clear paper trail should be kept throughout the process.

Right to time off

Under the Employment Rights Act 1996, an employee who is made redundant has a right to take reasonable time off work with pay during work hours to seek alternative employment so long as they have 2 years’ continuous service at the termination date.

Redundancy payment

An employee with at least two years’ continuous service is entitled to a statutory redundancy payment in addition to any contractual enhanced redundancy payment or other benefits that their employer may provide. Redundant employees will also be entitled to notice or a payment in lieu, depending on the terms of their contract.

If you require any advice in relation to redundancies, please do not hesitate to contact the employment team on 01228 552600.

In the next instalment we will be considering collective consultation where there is a proposal to make 20 or more employees redundant in a 90 period at one establishment.

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