With predictions of up to 1 million redundancies, many people feel like they’re walking a tightrope. If the outlook is precarious in your own workplace, it’s essential to understand your obligations and employees' rights
Redundancy is an area of law that is complex and frequently litigated. Even in ‘normal’ times, it’s easy for cases to end up in an Employment Tribunal.
In
Covid-19 time, there are added considerations and complications. To avoid the
stress and delay of a tribunal claim, it is preferable that everyone does the
right thing from the outset.
The basics
There are three types of situation where an employer can make redundancies:
- business closure
- workplace closure
- a reduced requirement for employees.
The procedures employers must follow depend on which of those scenarios is involved, and whether fewer than 20 redundancies are planned, or 20 and over.
Whatever the number of posts involved, employers must follow principles of transparency and fairness, and factor in time to communicate with affected employees.
There’s
insufficient space here to go into the full rules, but ACAS (an organisation
that provides workplace advice for both employers and employees) explains them
well on its website.
Covid-19 complications
We said the pandemic has added new considerations to managing redundancies, and here are two examples:
Consulting with employees: The usual consultation procedures have been rendered more difficult by social distancing and businesses having staff on furlough leave or working remotely. Employers must find alternative – and fair - consultation arrangements such as online meetings.
Selection
criteria: In normal times, common selection criteria for redundancies include
attendance levels, disciplinary records, appraisals or productivity. But we’re
not in normal times. Employers must work out how to score everyone fairly when
some staff may have been furloughed or sick.
The pandemic is no excuse for employers to bend rules
We’re hearing regular reports of employers making mistakes on redundancy because they’re following their previous approach – which may not be Covid-appropriate.
Conversely, there are stories of employers thinking the pandemic has opened the way for a redundancy free-for-all, and letting staff go by text or email.
Economic uncertainty relating to the ‘second wave’ creates other pitfalls. ACAS gives the example of an employer initially planning 15 redundancies but then having to make 20; it may be unaware that different procedures apply.
In such
situations, employers should not assume the rules can be waived or bent to suit
the times.
Questions for employees to ask
I’ve been offered a severance package /settlement agreement – what do I do?
- Are you happy with the offer? Employees need to make sure it represents a good deal for them in all of the circumstances.
- How does it stack up with your statutory entitlements? Employees should obtain specific advice if they are unsure or wish to confirm their minimum entitlements in law, to ensure the offer available is favourable by comparison.
- What are your job prospects – in and out of the business? Considering how long it may take to find new employment and the cost to the employee, compared to the sum of money offered, should be a consideration in accepting the offer or negotiating on the terms.
- Where can I get advice? We can offer pragmatic advice and guide you through the settlement process. Usually employers will include a contribution towards an employee’s legal fees within the offer.
Cool heads in stressful times
Whether you’re an employee facing redundancy or an employer considering cuts, this is a difficult time. It’s important to:
- understand the rules
- ensure they’re properly applied in your own circumstances
- know how the pandemic may affect you.
For all involved, some cool-headed advice will help here, reducing the scope for poor decisions.
Whether you’re worried about redundancy, have received an offer, or are thinking of redundancies, our experienced employment team is ready to help.
You can access the calculator on the UK government website here.
