Legal advice: Redundancies – dos, don’ts and can you avoid them?
If you are one of the many businesses contemplating redundancies as a consequence of Covid-19 then firstly, you are not alone. The retail sector has been hit hard by self-isolation measures and it is not always possible to save every job.
Over the past couple of weeks, we have been working with clients in the sector to see how best they can weather the coronavirus storm.
For the most part, these conversations have been positive in that the focus has generally been about retaining staff and making the most of the government’s support schemes. For instance, the option to furlough certain employees and protect 80% of their salary.
However, if you have exhausted all options and redundancy is the route that your business needs to take, here’s a quick reminder of some key dos and don’ts.
- Be clear about why a redundancy situation has arisen.
- Consult with your employees. If you are proposing to dismiss 20 or more employees over a 90-day period then you must elect employee representatives and consult collectively for at least 30 days. If you are proposing 100 or more redundancies over 90 days, the same applies for at least 45 days. Remember, this should include redundancies that you have already made if they will fall in the same 90-day period as the next redundancy round.
- File an HR1 form notifying the government if you are consulting collectively.
- Give employees/their representatives a right to be accompanied to meetings. Bearing in mind the government’s current advice, meetings should take place via telephone or video conference.
- Pool and select potentially redundant roles objectively and fairly. Watch out for unconscious bias and inadvertent discrimination.
- Consider possible alternatives to redundancy and other suitable vacancies within your business. If there are none then explain why.
- Consider bumping (stepping a redundant employee into someone else’s role and making that person redundant instead).
- Allow a right of appeal.
- Take lots of notes and make a detailed record of your meetings so you have a complete paper trail of the process you have followed.
- Honour your obligation to make statutory and/or contractual redundancy payments as well as other contractual termination payments.
- If a full process is not possible (e.g. because of the cost), consider seeking agreement to a shorter process in exchange for a waiver of claims (settlement agreement). However, proceed with caution – see ‘don’ts’ below.
- Make a role redundant if the dismissal is actually driven by something else (e.g. performance). You would be surprised how often this happens.
- Make any decisions before the consultation has concluded.
- Forget that everything you put in writing has the potential to be used as evidence in an Employment Tribunal. This includes internal messaging, texts and emails.
- Underestimate the power of communication. Keep your messaging consistent and make sure line managers, HR and anyone else involved are consistent. If you say one thing and HR says another, it can undermine the whole process.
- Offer a settlement deal unless you are sure that you can do so on a without prejudice basis.
- Jump the gun! Have you considered alternatives to redundancy, to hibernate the business or reduce costs temporarily? For instance:
– Furloughing some of your employees using the government’s Coronavirus Job Retention Scheme?
– Whether you have a contractual right to lay-off staff or short-time working?
– Varying contracts to reduce hours or pay arrangements?
– Exploring alternative leave arrangements?
– Freezing recruitment or postponing the start dates of new joiners?
(Bearing in mind of course that there are legal delicacies involved in getting these alternatives right.)
This may seem like a long list but there is often flexibility available. To what degree will depend on the nature of your proposed redundancies and the workforce involved.
Finally, whatever is the best route for your business, don’t forget to future-proof your strategy. Make sure you aren’t taking steps that will lead to unintended consequences in the future, not least employment claims and costs.
First published in CWB
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