In response to the Covid-19 pandemic, many businesses have had to make changes to their workforces, with redundancies on the rise due to the financial impact of lockdown, and its continuation forcing some employers to permanently reduce staffing levels.
Making redundancies at the current time brings added logistical challenges, such as how to consult employees who are working from home or on furlough, and how to elect representatives if collective consultation is required. If you are a business owner contemplating making redundancies, here are some of the main things to keep in mind.
Consider if you can avoid redundancies
From a legal perspective, a redundancy situation arises where a business is closing, is closing a site or place of work, or where it has a diminished need for employees to carry out work of a particular kind.
Government policy very much encourages businesses to consider redundancies at this time as a last resort, rather than a first response, and it is certainly best practice to utilise all the available support to avoid making redundancies where possible. The extension of the furlough scheme until the end of October, for example, will allow many businesses to delay decisions around redundancies until later in the year, particularly as, from August, it permits employees to return to work on a part-time basis while still getting support from the Coronavirus Job Retention Scheme.
Businesses could consider consulting staff about implementing across the board pay cuts or benefit reductions on a temporary or long-term basis. In these unprecedented times staff may be willing to agree to this, where the alternative could realistically involve job losses or business closures.
Employers could also explore the possibility of offering unpaid leave, career breaks or enforced holidays for staff in anticipation of the economy recovering from the effects of the pandemic.
Plan and resource carefully
Inevitably, there will be times when commercial reality dictates that redundancies are the best course of action for the business. In order for the process to run as smoothly as possible, it is essential that businesses invest time into considering how many redundancies may be required, what the options are for avoiding redundancies, and who will be responsible for implementing the redundancy consultation.
Planning and preparation will help identify issues early, allow support mechanisms to be put in place for those who need it (including staff not directly affected by the process), and ensure the organisation has all the necessary resources in place to cope and make the process run as smoothly as possible.. Failure to do this properly could open the business up to claims of unfair dismissal, breach of contract and failure to consult, in cases where collective consultation is required.
Approach with compassion
Clear communication and sensitive delivery are vital in any redundancy situation and those losing their jobs in the current climate may be particularly concerned about what the future holds. Those responsible for managing the consultation process must feel confident about the rationale for the redundancy process and the purpose and mechanics of the consultation process. There is currently the added complication of how to hold a consultation meeting where many staff are working remotely. Video conferencing can be used as long as both parties are comfortable with the technology and it does not prevent employers from conducting a reasonable consultation process.
Employers should approach the situation with care and ensure the correct processes are followed.
Seek expert support
Seeking legal counsel prior to starting the redundancy process allows companies to understand their legal obligations and gives them the confidence to deal with what is inevitably a very stressful process. This forward planning can go a long way in determining a positive overall outcome for the business. A qualified legal advisor with experience in dealing with employment issues will be able to guide the company through the necessary processes to ensure the risk of unfair dismissal is minimised.
Proper preparation and execution of the process backed by professional legal guidance will inevitably bring the company peace of mind and mitigate against any potential claims.
James Simpson is head of employment at Blaser Mills Law