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COVID-19: making employees redundant

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Posted by Tina Chander on 05 May 2020

Tina Chander Partner - Head of Employment Law

The current economic climate is understandably taking its toll on many industries. While the coronavirus Job Retention Scheme has eased the pressure, many employers are facing as a result of Covid-19, this is only a temporary measure and businesses will undoubtedly continue to experience its effects for months to come.

Unfortunately, this means that many employers will soon be required to seriously consider whether they are financially able to retain headcount, or whether they will need to embark on a redundancy exercise. Of course, redundancies should only be implemented as a last resort; employers first having explored alternative cost-saving measures, such as reduced hours, temporary lay-offs and/or cessation of overtime, to name a few.

As always, the redundancy process must be fair and transparent to ensure employers minimise the risks of discrimination, constructive unfair dismissal and/or ultimately unfair dismissal claims. Initially, this will involve demonstrating there is a genuine reason for the proposed redundancies, whether this is a complete site closure, reduced availability of work generally within the business, or the reduced requirement for individual roles. Given the severe impact Covid-19 has thus far had on employers, it is unlikely employers will struggle to establish a genuine rationale for redundancy. However, it is essential that businesses do not overlook this, simply because they believe it to be obvious, or the outcome of the process to be inevitable.

Further stages of the process will include providing any employees who are “at-risk” of redundancy with written confirmation of this and inviting them to attend meaningful consultation meetings to discuss the employer’s proposal. Employees must be given the right to attend the meetings with a companion (either a Trade Union representative or a colleague) and also to appeal against the employer’s decision to adopt its proposal and terminate the employee’s employment by reason of redundancy, should this be the final outcome of the process. Please bear in mind that even if a redundancy dismissal seems unavoidable, employers must keep an open mind throughout the process and enquire as to whether the employee has any counter proposals for it to consider. You never know what ideas employees may come up with! In addition, employers must also continuously review suitable alternative employment opportunities before confirming a decision to dismiss (and during any worked period of notice).

Finally, but very importantly, let’s not forget the ever-crucial stage of collective consultation which must occur in situations where it is proposed that 20 or more employees in one establishment will be dismissed in any 90-day period. The obligations employers face in respect of Collective Consultation will depend on the exact numbers involved in the process.

While it is hoped the Job Retention Scheme will alleviate redundancy considerations for businesses in the short and medium-term, in reality, redundancy consultation is inevitable due to the impact this pandemic has had on the economy. The ripple effect when something like Covid-19 arises is undoubtedly substantial, and there will be some sectors who are feeling the impact more severely than others. These sectors may already be at the stage of needing to implement redundancies to stay afloat during this uncertain and unprecedented time.

If your business needs any assistance with planning and implementing a redundancy project, especially surrounding the often tricky area of Collective Consultation, please get in contact with our employment team who will be happy to help.

About the author

Tina Chander

Partner - Head of Employment Law

Tina is head of our employment law team. She deals with contentious and non-contentious employment law issues.

Tina Chander

Tina is head of our employment law team. She deals with contentious and non-contentious employment law issues.

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