With the last few months bringing very little clarity and certainty, most businesses throughout the UK have been struggling to operate as usual. Unfortunately, some businesses have had to temporarily close, whilst others continue to struggle through the crisis and have been forced to make critical business decisions in order to stay operating.
On 20th March 2020, the Government announced the Job Retention Scheme to provide support for employers who have been experiencing difficulties in paying their members of staff during the crisis, with the scheme paying 80% of employee wages.
Whilst this has become a lifeline for businesses in the UK to survive, some employers are still finding themselves unable to financially cope and continue. As the level of grant will be reduced each month, we have seen a wave of redundancies as more and more businesses are forced to make decisions.
Making redundancies is not easy and should always be the last resort. If you are considering making redundancies to your team, you might be wondering how best to approach it.
Keep Regular Contact
We have seen many furloughed employees voicing their concerns over the lack of communication from management and the wider team whilst they are out of work. When making redundancies, furloughed employees often feel disheartened in the company if they feel that communication hasn’t been made for several weeks/months, before they unexpectedly receive a notice of resignation.
Unfortunately, this lack of communication will leave furloughed employees feeling out of sync with the business and may result in employees feeling that their job may be at risk, or that not enough has been done on your part.
While your furloughed employees are still a part of your team and are members of your business, you should keep regular contact with them every step of the way. Whether it’s a weekly email to update them on company changes or new processes, or even a monthly call, regular touchpoints and communication can go a long way.
Consult Your Employees
The timing of when to start consulting employees is a delicate balance. Legally you must start consultation before any decisions are set in stone, and yet starting a conversation too soon can create unnecessary concern.
Typically a collective consultation process (involving 20 or more roles at risk) will require much more careful and detailed planning. In any event, it is essential that proposed plans are discussed with all employees so that everyone understands the process before your redundancy proposals are finalised.
There are typically several areas to consult on:
It’s important to allow time to properly consult on all areas. In my experience as a redundancy coach, while consultation is an essential part of the process, both legally and ethically, many employees want to jump straight to the final stage, and understand the impact on them before consultation has happened. Whether this is because of personal circumstances (needing to understand what they will get as a payment) or because they don’t believe a true consultation will make any difference, they are likely to have questions surrounding your redundancy plans.
It’s important to strike the right balance here, and not jump too soon to an assumed conclusion - while it’s true that in my experience many roles identified at risk end up redundant, I have seen proposals change and roles initially identified as at risk remain safe (ie not redundant) at the end of the process. Redundancy consultation meetings can either take place individually or collectively with your team but should be carried out in person orby video call, where possible.
When considering a redundancy, you will need to define the criteria by which your employees are pooled, and therefore selected for redundancy. Your selection must not be discriminatory and should be considered very carefully. The selection must involve a fair application of objective selection criteria to a reasonably constituted pool of employees as they will need to be consulted about the selection process before your decision is finalised.
It’s important to remember that whilst your employees are furloughed, the usual employment law and employee rights will apply. This means that the requirements will still remain and that your selection pools are fair, reasonable and do not discriminate against your employees in any way.
Selecting your furloughed employees for redundancy on the basis that they have been furloughed isn’t a robust enough factor as it depends on the reason why your employees have been furloughed. Some employees may be furloughed due to shielding reasons, or they may have responsibilities with children or someone they may care for.
You must also ensure that decisions are not made based on their responsibilities, such as child-care or a serious health condition. It’s important that your employees know they are not at a higher risk of redundancy due to these reasons or the fact they have been furloughed.
You must be aware that your employees will have rights and they will be entitled to redundancy pay if they have worked for the company for more than two years, or less if your company policy is enhanced from the statutory minimum.
All employees who are given notice of redundancy will have the right to have reasonable time off to look for a new job, so you mustn’t unreasonably deny them time off for interviews, even if they are working their notice.
Remember that an employee’s statutory notice may be greater than their contractual notice. Every employee is entitled to 1 week statutory notice per completed year, capped at 12 weeks. So if an employee has 12 years’ service, and 1 month notice, in a redundancy situation the company must pay 12 weeks’ notice (even though the employee could have always resigned with 1 month notice).
Your employees will also have a right to not be unfairly selected for redundancy, so you must provide reasoning for their redundancy that doesn’t discriminate against them, otherwise, you may face an employment tribunal.
There is an argument that redundancy isn’t necessary whilst the furlough job retention scheme is in place, however, most businesses will have had to make different sacrifices to continue operating and some will be affected more than others. Redundancies are fair if it is the only solution to keep your business going, whether it’s during the COVID-19 pandemic or on a normal basis.
However, if you are considering using redundancy as a means to continue business yet have not made use of the furlough scheme, your employees may feel this is unfair and you must take into consideration that employees can claim unfair dismissal if they have two or more years’ service at the company.
Consider Alternative Options
Rather than making redundancies, it is essential to consider other alternative options, such as reducing the hours some employees work. Whilst this isn’t ideal, the spirit of the law requires all effort to be made to avoid redundancy, before and during consultation. A person can be confirmed redundant and working their notice, and still redeployed before their final date of employment.
Use an HR Redundancy Consultant
If you are unsure of how to handle redundancy within your business, or need to support the wellbeing or your employees, you may benefit from using an experienced HR manager like me.
As a HR and redundancy coach, I can provide support in two key areas.
1. Help to manage the redundancy process
I can provide a framework to follow, scripts for managers to use, handle all the paperwork and legalities, taking a huge weight off your shoulders. In more complex collective consultations for 20 or more roles, this support is paramount, such as completing and submitting the HR1 form to the government, establishing your employee reps or working with the unions and more. Outsourcing HR expertise will significantly contribute towards the decision-making process, ensure organisational decisions are commercially and legally robust, and will keep you on track with employee and employer rights.
2. Redundancy coaching support for affected employees
Many employers feel dreadful about making someone redundant, and want to offer support where they can. I can support affected employees with my redundancy coaching programme which helps employees to quickly bounce back from redundancy and find a new job.
Whether you’re making redundancies due to the coronavirus crisis or are generally struggling to operate and have concerns about keeping your staff members, I can support every step of the way.
For more information on how we can help, please get in touch.
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