Planning and making redundancies

23 Apr 2020

Planning and making redundancies

To think that a little over four weeks ago the word "furlough" was not part of our vocabulary.  And now, as we write this, your applications have probably already been submitted to the HMRC portal, you breathe a brief sigh of relief, before you then turn your minds to the "R word".

Relax? Reinvigorate? Recuperate? Reflect? Ideally yes, but sadly we refer to Redundancy.

Many of you will, quite rightly, have taken the opportunity to furlough large parts of your workforce as a short-term measure to help staff retain an income whilst you consider the broader impact of the crisis, and how your business needs to be re-shaped as we come out of the other side.

When advising clients about redundancies, tend to focus on four key issues:

1.  Is there a redundancy situation? This should currently not be difficult to establish, as you need to show a reduced need to do work of a particular kind, or alternatively you need to close a site.

2.  How will you fairly select employees for redundancy? Where stand-alone roles are removed then selection is more straightforward. However, often things are not quite that easy, particularly where you are looking to make multiple redundancies. You must look broadly at roles and individuals' skills. If they have transferable skills, you may need to place them in a pool for selection with other colleagues. You then should conduct an objective scoring process to determine who should stay, and who is selected for redundancy. Have you got the right people in the pool? Are you choosing the right scoring criteria? Have you got the evidence to support the scores being given? This is an area of frequent challenge by staff, and one where we often see mistakes being made by employers.

3.  Has there been a proper consideration of alternative employment? You may have no vacancies. But, if there are vacancies, or likely to be, make sure you properly engage with 'at risk' staff over these opportunities.

4.  Has there been full and effective consultation? This needs to be a two way dialogue where you are seen to seek views, consider those views, and engage fully with staff before making any final decisions.

We see these as the basic considerations when approaching potential redundancies but there are two other important factors to remember as you start to plan the size and shape of your workforce for the future.
  •  It is fair to dismiss staff by reason of redundancy or reorganisation. These are two slightly different concepts. If you want to reshape the business and re-define roles as your strategic focus changes post-COVID-19 then you can do that. That may, or may not, lead to a smaller workforce. But it can be done, as long as you follow a fair and robust process .
  • You must keep in mind the obligation to collectively consult. If you are particularly hard hit by the crisis, and losing or changing more than 20 roles, then the obligation  to collectively consult will almost certainly be triggered. As well as having to consult a recognised union or elected staff representatives, you need to build in the minimum 30 day consultation period (or 45 days, if more than 99 people are affected).
With many employers having furloughed large numbers of their staff, there are a number of questions that need to be considered
  • How are you going to effectively consult your staff?
  • Do you have to wait until the end of their furlough period before you begin consulting?
  • Are the collective consultation obligations triggered?
  • What is the impact if you have redundancies at multiple sites?
  • How can you properly elect staff representatives if your furloughed staff do not engage?
These are all important questions, and ones we will be answering as part of a series of webinars over the coming weeks. For further details join us at one of our upcoming webinars.

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