REDUNDANCY– a guide for employers/employees

Rights under the furlough scheme(CJRS)

It is clear that the Covid-19 crisis has caused considerable pain and anxiety to many in the UK, in so many ways. Many millions of employees were, or have been, ‘furloughed’ under the government’s Coronavirus Job Retention Scheme (CJRS), the purpose of which was to reduce the impact on business.

That scheme will be unwinding and coming to an end after October 2020. In these months now, there may sadly be large-scale redundancies as workers who were previously furloughed are laid off for economic reasons.

So, I am going to examine here the situation from the viewpoint of both employers and employees. 

As an employer, how and when can you lawfully make an employee redundant? What would be the consequences of doing it wrongfully?

From the employees’ viewpoint, if you are threatened with redundancy or made redundant, what can you do to argue against it? In what circumstances might you have a potential claim against your employer? How would you bring a claim, and what might it be worth?

 

Specific furloughrelated redundancy questions

Can furloughed workers be made redundant at all? It has been suggested that the fact that they have been furloughed means that their jobs are safe as long as the furlough scheme is operating in some form or another. Unfortunately not; the employer can make an employee who was furloughed previously still redundant at a later point. This is despite the fact that the scheme is ironically properly named as the ‘coronavirus job retention scheme’!

How does the CJRS affect basic employment rights?It should not really affect employment rights very much. The basic principles on notice pay, holiday pay, maternity pay and redudandy selection remain the same. 

How should an employer approach redundancy?

The basic points – a redundancy should be fair, reasonable and lawful.

It should obviously fulfil the statutory definition of redundancy, which essentially means that there is a reduced need by the employer, for employees to dowork of a particular kind, than previously. Given the economic turmoil over the last few months caused by the covid-19 crisis, that is likely to be quite easy to establish in principle, at least.

If there are several possible redundancy candidates, or employees employed to do the same  job, the vital question is: who should the employer pick? Picking the wrong people in an illegitimate way, or using unfair criteria could result in a serious problem.

If you are the employee, you will feel rightly aggrieved if someone else should have been selected before you. The traditional method is to first pick a ‘pool’ of suitable candidates using certain criteria. Then you must use certain criteria to whittle down the pool to those employees that are required to be made redundant.

How large should that ‘pool’ be? What are acceptable criteria. There is no easy answer in broad terms but the criteria must be as objective as possible, not just pure subjective opinion. Many criteria have an element of opinion within them.The point is that the criterion should be assessable in some way, and not be purely arbitrary.  

It should not obviously also not be indirectly discriminatory against a protected category such as women. Any suggestion that an employee was harassed or ‘pushed out’ illegitimately by the employer, under the guise of a redundancy process will be deadly for the employer, and could result in a successful unfair dismissal claim before an employment tribunal.  

 

Consultation

There must be some sort of consultation process so that things are discussed with the employee in a meaningful way before a final decision is reached. That is true even if the employer believes that consultation will be fruitless. I would recommend allowing four weeks between before making a final decision, after first telling the employee about the prospect of redundancy. Consultation should be meaningful and genuine, not just a robotic exercise.

Alternative employment

The employer must always only use redundancy as a final step after considering alternatives such as a different position within the company. If there are such alternatives, they should be offered. It is the employee’s prerogative as to whether to accept them. Even positions involving a slightly lower grade or pay should be considered; it may be that the employee is willing to accept.  

General advice

There are many countless pitfalls for unwary employers and it is a vital to have guidance from an expert solicitor. Avoiding tribunal claims is far cheaper than fighting them. I would go as far as to say that small employers who do not receive expert advice on redundancy advice will almost certainly fail at some point in the process, although in many cases, employees might not be sufficiently aware of their rights to fight a claim.  

If you are an employee who has been perhaps unfairly selected, you may have a claim for unfair dismissal. You need to move quickly to get advice on issuing a tribunal claim to avoid losing your right to do so. The basic time limit is less than three months from the time of dismissal.

Please arrange a consultation with me for detailed advice pertaining to your situation.