From 1st September, grants under the Coronavirus Job Retention Scheme were reduced to cover only 70% of employee’s average salary. Furloughed employees are, however, still entitled to at least 80% their average earnings; the onus is therefore now on employers to top up the grant to ensure that the minimum is met.
With a further reduction to contributions to take effect from 1st October (down to 60%) and the scheme’s closure firmly set for 31st October many businesses are considering ways in which they can save costs once government support stops. Increasingly, we are being asked to advise on redundancy as one such measure. Redundancy is a potentially fair reason to dismiss but as is the case with any dismissal, employers must follow a fair and reasonable process.
Below are the key stages you should be following to ensure you conduct a fair redundancy process and therefore keep the risks of claims to a minimum:
1. Identify a genuine redundancy situation. A redundancy situation can arise if there is a diminished requirement to perform certain work or if it is necessary to close all or part of your business.
2. Place employees at risk of redundancy. The process is slightly different depending on whether the employees are in standalone roles or they carry out similar or the same roles as others. Please contact us for further advice on this.
3. Consulting with employees. Consultation is an integral part of the redundancy process. It will ensure that employees are well informed as to why redundancies are considered necessary and allows both you and them an opportunity to consider alternatives.
4. Confirm the redundancy in writing. Whilst you don’t have to give the right of appeal, we recommend that you do so that you are forewarned of any challenge that they may wish to bring.
The above guidance assumes that there are no complications in the redundancy process, employers should be wary of the following areas when considering redundancies:
• Employees who are protected as disabled under the provisions of the Equality Act- when scoring disabled employees against selection criteria employers should not include any absences arising from a disability.
• Employees who have raised grievances or who are on any kind of special leave such as maternity, paternity or adoption leave.
• Redundancy payment calculations. It is important to ensure employees have chance to consider and query their employer’s calculation of any redundancy payment, however, providing these early on in the process can give employees the impression that a decision has already been made.
• Roles are made redundant, not people. Referring to an individual as redundant rather than their role can give the impression that the decision is personal and not based on business needs.
• Pools of one. Employees performing stand-alone roles may be identified as the only employee at risk. Employers should be careful about asserting that an employee performs a stand-alone role, as a Tribunal will not only look at their job title but at the work they carry out day to day.
Please note that the guidance in this update applies when you make less than 20 redundancies in any 90-day period. If you anticipate that you will need to make more than 20 redundancies, please contact us.
In order to support business at this time we have developed resource packs containing guidance on the redundancy process, as well as template letters and meeting notes. If you are interested in purchasing of these packs or would like advice on your particular circumstances, please contact us.