Even though the Coronavirus Job Retention Scheme runs until to 31 October, many employers are having to make difficult decisions about the future of their businesses which can include making redundancies. Now is the time to make these difficult decisions, whilst furlough funding is still available from the government which can be used towards notice periods.
Redundancies in employment law can be a minefield, and in these difficult economic times employees have more reason to pursue their claims in court. It may seem unfair to make employees redundant and no-one wants to have to do this; however if difficult decisions are deferred, more drastic action may need to be taken later on. Prior planning is vital to ensure lawful and fair processes are followed; there is no point making painful savings if those savings are eaten up by compensation claims.
Is making employees redundant during Covid unfair?
In legal terms it is perfectly fair, provided there is a redundancy situation and a fair process is followed.
As we all know though redundancy can have a significant impact on the morale and wellbeing of employees. Couple that with the current economic climate, predicted large-scale unemployment and concerns about the number of new jobs, and there is no question that employees will have their own views about what is fair.
It is therefore doubly important that employers approach a redundancy process fairly and lawfully, treating all employees with dignity and respect. Even aside from the legal risks of getting it wrong, which are not inconsiderable, handling redundancies in a compassionate way can make a significant difference to how people cope with the process. It will also have an impact on all the other employees who will be affected by the unsettling experience of seeing their colleagues being made redundant and may feel their own job is at risk. Planning the process properly is therefore absolutely vital.
When do I need to start planning for redundancies?
Given that the Coronavirus Job Retention Scheme is currently due to end on 31 October 2020, with government funding progressively diminishing until this date, it is essential that employers make any difficult decisions as soon as possible. This will ensure that there is time to plan and, when the time comes, follow a lawful redundancy process whilst making best use of the furlough funding.
Can I still make furloughed staff redundant?
Yes – provided you do so fairly. If you don’t – and employees may remind you that the Coronavirus Job Retention Scheme was put in place to help organisations avoid redundancies - employees who are made redundant may bring an unfair dismissal claim. Whether a dismissal is considered unfair by an Employment Tribunal will depend on the circumstances and how reasonable the business was in making those redundancies. Employers should consider alternatives; which may for example include fully utilising the furlough scheme before any redundancies take effect.
How can I meet with employees safely during Covid?
The usual obligation to consult with staff about any redundancy proposals and allow them to comment on these before they are finalised will continue to apply irrespective of whether staff are furloughed or not. However the question of what a fair process will look like in the current circumstances may differ.
A main issue to consider when undertaking redundancy consultation processes with staff who are furloughed is the logistical issue of how to fairly contact staff remotely. Redundancy consultation meetings will still need to take place, individually and/or collectively, as appropriate, but these may have to be arranged and carried out remotely. Employers may need to build extra time into the consultation process to allow for any logistical issues which may arise. However with many business now opening, if meetings can be undertaken face to face, in a safe and socially distanced environment, this may be preferable.
How can Tozers Help?
We can take you through what you need to do step-by-step, helping you get the process right. This can help make the process run much more smoothly for both employer and employees, as well as reducing the risk of an expensive legal claim.
Tozers employment team have developed a fixed fee Coronavirus Employer Support Pack which is aimed at addressing your common questions through guidance notes and regular updates as well as providing a suite of documents to use in your communications. This along with our Employer Redundancy Pack will be vital in making sure you can secure the future of your business, and reduce your workforce lawfully, properly and with minimal risk to the business. They are both available to download on our resources page.
For further advice on furloughing staff and redundancies visit our support hub or read our current insights, alternatively members of our Employment Team would be happy to help if you have any further questions.