When furlough ends, or Government payments reduce, will you need to make redundancies? Now is a good time to be thinking about your options.
The urgency
If making 20 or more redundant in a 90 day period there is a statutory requirement to notify the Secretary of State before any process commences and to carry out a 30 day collective consultation process. If it is 100 or more employees in a 90 day period it is a 45 day consultation period. The consultation must commence in good time and meet the applicable minimum period.
Those consultations will need to be with the Trade Union, if you recognise one, or employee representatives. There are a few boxes you will need to tick in terms of finding employee representatives (if no Trade Union), what information to provide and the matters to be discussed.
Alternatives to redundancy
- Reduced hours. If you present this as an alternative to redundancy, then this will trigger the consultation periods (see above).
- Reduced terms (subject to national minimum wage). These could also trigger consultation periods.
- Lay-offs – if the lay-off runs for four weeks (or in certain cases 6 weeks), then employees may be able to claim redundancy and the appropriate payment.
- Unpaid leave – Employees could retain their length of service so for some it could be attractive It needs to be entirely voluntary and the terms recorded in writing. You cannot present this as an alternative to redundancy or it might be seen as coercion.
Staff with less than 2 years’ service
These employees do not have unfair dismissal rights or right to any redundancy pay. There must be no unlawful discrimination, and you should have a meeting with them to explain the reason for the redundancy. While the reason may be self-evident, giving them the opportunity to challenge the reason vastly reduces the already small risk of them raising a Tribunal claim to do so.
Legitimate bases, if they apply, on which an employee could challenge a decision include:
- That they asserted a statutory right (such as maternity leave)
- Made a health and safety complaint or were a whistleblower
- Worked part-time when other full-time employees in the same job were retained
- Refused to work on a Sunday
- Are a trade union member (when non-union members in the same job have been retained)
Employees with greater service
It is crucial that you follow a fair redundancy process as far as you reasonably can. If not, there is a risk of an unfair dismissal claim that could succeed.
The points made about those with less than 2 years’ service also apply, of course.
Further guidance:
Employer Solutions has the knowledge and experience to help by:
- Developing a fair redundancy policy
- Discussing alternatives
- Advice on lay-offs thereby reducing risk of claims for redundancy
- Providing guidance on legal requirements
- Assessing risks
- Drafting documentation
- Hands-on / digital support in consulting with TU or employee representatives
Malcolm Martin FCIPD
Author Human Resource Practice
Blogs are for general guidance and are not an authoritative statement of the law.