We are all slowly trying to embrace the ‘new normal’. However, we are not out of the darkness yet when it comes to the pandemic. With spikes in the virus spreading, we have seen the introduction of local lockdowns, the wearing of masks and curfews.
We rejoiced when the government introduced the furlough scheme which safeguarded a number of jobs that would have otherwise been at risk. However, with furlough inevitably coming to an end on 31st October 2020, the government have announced that the furlough scheme will be replaced by the Job Support Scheme from 1st November 2020.
Read more: Everything You Need to Know About the Job Support Scheme: FAQs Answered
Even with the Job Support Scheme, an employer is still expected to pay 55% of their employee’s salary for only 33% work, in some cases. Placing employers in an extremely difficult position with limited options available.
We anticipate that the travel and hospitality industry will be hardest hit. The affects can already be seen by Cineworld’s announcement to temporarily close all cinemas and making staff redundant.
Are You Considering Making Redundancies?
If, as a result of the pandemic, you are considering making redundancies, you should ensure that you have a robust procedure in place. Failure to do so could amount to unfair dismissal claims being pursued by your employees.
Below we have set out the 5 steps you should consider when proposing redundancies:
A Genuine Redundancy Reason
An employer must establish that there is a genuine redundancy reason and satisfy the statutory definition for redundancy. The statutory definition is as follows:
- An entire business closure
- A specific workplace closure, or
- A reduced need for employees to conduct work of a particular kind.
As an employer, it is important that when making an employee redundant it satisfies the statutory definition, if it is found that you disguised the actual reason for their dismissal e.g. conduct, it will be deemed that there was no genuine redundancy and an employee will be able to claim unfair dismissal.
Firstly, you should establish how many redundancies are being proposed, for example:
- Less than 20 redundancies, it will be necessary to follow a fair procedure in relation to each employee at risk of redundancy.
- If 20 or more redundancies are being proposed in a 90-day period, then collective consultation obligations will arise and it will be necessary to notify the Secretary of State of the proposed redundancies.
If 20 or more employees will be put at risk of redundancy, please contact us directly, we will be able to provide you with necessary information relating to your collective consultation obligations.
When selecting employees who are at risk, the pool may be obvious in certain circumstances where for example you are getting rid of a department or a certain role.
However, it may not be as easy to identify a pool of employees in every situation. Therefore, it is important to consider the employees, skill set, tasks and duties, where an employer identifies that the employee’s roles and/or departments are similar, pooling may be applicable.
A tribunal will consider whether the selection/pool has been applied fairly.
Once you have identified the individuals who are at risk, an announcement should be made to those employees informing them that they have been placed at risk of redundancy. Individual consultation with each employee will then need to take place, (this only applies when making less than 20 employees redundant), this is a fundamental part when dealing with the redundancy process.
Consultation meetings provide the employee and the employer with the opportunity to discuss the redundancy situation in further detail, discuss the selection criteria as well as look at and explore other alternatives/suggestions in order to avoid redundancy.
At this stage employees should be considered at risk and not redundant, there should be no pre-determined decision to make those at risk redundant at this stage.
You should ensure that notes are taking at these meetings.
You must consider whether there are any suitable alternative employment opportunities within the business which the employee could apply for and discuss this at the consultation meeting. An employee should be given the opportunity to declare an interest in applying for the role.
If you fail to consider whether there is any suitable alternative employment, then a dismissal by way of redundancy will be deemed unfair.
You are not expected to create roles for individuals at risk of redundancy, however, you are expected to conduct a reasonable search for existing roles. You should ensure that these searches are evidenced.
If at the end of the consultation period, it is inevitable that redundancies need to be made, you should inform the employee in writing and provide them with a breakdown of their pay.
An employee who is made redundant is entitled to be paid the following:
- Statutory Redundancy Pay
- Notice entitlement
- Untaken holiday accrual
Please also review the contract of employment and staff handbook, to ensure that the employee receives the correct entitlement.
Looking for Employment Law Advice?
Whether you’re considering making redundancies or not, if you would like to learn the latest news, please read our post ‘Howells Employment Updates: August 2020’.
For specific cases or legal advice, please get in touch with our employment team.