With the end of furlough looming there has been heightened media coverage around potential job losses across business sectors. The UK officially entered recession after GDP plunged by a record 20.4% in the second quarter of the year. But we hasten to add that it is not all doom and gloom, the Chancellor's 'Eat Out to Help Out' scheme gave the UK economy a boost as activity picked up during August and it grew at it’s fastest pace since 2013.
Despite a positive increase there are key sectors that have been devastated by the impact of COVID-19, and many businesses will be forced to make the decision to reduce their workforce in the coming months. Any decisions to make redundancies should be viewed as a last resort – other options such as a hiring freeze or reducing overtime, should have been considered first.
Redundancies can create a very challenging and upsetting situation for affected employees and the wider workforce. Announcing redundancies will affects staff morale, motivation and productivity and the redundancy situation needs to be handled as sensitively as possible to reduce any negative impact.
If your business is in a position where you are going to be making redundancies, here are some of the key points that you should be considering, but we would always urge that you take professional advice before starting any redundancies.
1. Voluntary redundancy
There may be employees who wish to take voluntary redundancy, which could reduce or avoid the need for a compulsory redundancy scheme. consider putting out a communication to your business asking whether there are any employees who would consider voluntary redundancy.
2. Selection criteria
As an employer you need to be able to clearly demonstrate the reasoning for the selection of those roles (often referred to as pools) that are at risk of redundancy. The selection criteria should be transparent and great care should be taken in the choice and application of the criteria to avoid discrimination. individuals who are selected should be told why they were selected and how they were assessed against each of the criteria.
Employers are required to consult with employees and give them reasonable warning of impending redundancies.
If there are 20 or more employees at one establishment are to be made redundant, collective consultations with recognised trade unions or elected representatives must start within minimum time scales (30 days for 20 – 99 redundancies and at least 45 days for 100 or more redundancies).
Although there’s no minimum statutory timescale when fewer than 20 employees are made redundant, the individual consultation still needs to be meaningful and timely.
Don’t forget an employee is entitled to be accompanied at all individual consultation meetings by a trade union representative or colleague.
4. Family leave and pregnancy
In any redundancy exercise it is crucial to ensure that pregnant women and those on maternity, adoption or shared parental leave are not placed at a disadvantage. You can make employees redundant while pregnant or on family, but there are strict rules that must be followed before this can happen. If an employee is on maternity or parental leave, and there is a genuine reason to make the role redundant, you must offer a suitable alternative work if it is available and these employees should be given priority over other employees.
5. Suitable Alternative Employment
Whilst carrying out a redundancy exercise consider whether there is any suitable alternative roles within the company that you can offer affected employees.
If your business has women who are on maternity leave who are made redundant, they have the right to be offered a suitable alternative role in advance of their colleagues.
If your business is considering a restructure or reorganisation please get in touch with Lodge Court.
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Disclaimer – The contents of this blog do not constitute legal advice and are provided for general information purposes only. We can only advise on the basis of specific client instructions and are unable to offer legal advice by email to anyone who are not our clients. To find out more about becoming a client of Lodge Court please talk to us.