As the nation tries to return to some form of normal living and working, unfortunately there are a lot of businesses who are still struggling with the current economic trading levels and it is difficult to predict recovery times.
Unfortunately as a result of this, organisations are considering staff redundancies and of course the winding down of the Coronavirus Job Retention Scheme which has allowed employers to place staff on furlough and draw down payments to cover wages will also likely have an impact on this.
Here we set out the key areas an employer needs to consider and work through to handle any potential redundancies.
Defining Redundancy
Employers must be clear on why a redundancy situation is proposed e.g. is there less work, has a contract been lost etc. The brief definition of redundancy is that work has ceased or diminished.
Collective Consultation Requirements
Where the organisation is proposing to make 20 to 99 employees redundant, collective consultation with a recognised trade union or elected representatives must take place for a period of at least 30 days before notice is served or before the first dismissal takes effect. Where the proposal is to make 100 or more employees redundant, the collective consultation period is 45 days.
Selection Criteria
Selection criteria must be applied where there is a pool of employees doing the same/ similar role. Examples of selection criteria include using a scoring system to assess areas such as attendance record, disciplinary record, experience, job knowledge, job performance etc.
The staff ‘at risk’ of redundancy identified i.e. the lowest scoring people in the pool, depending on the number of roles that the company is looking to reduce by.
Redundancy Consultation
Employees have a right to be consulted individually about why they have been provisionally selected for redundancy. Always allow for several consultation meetings to take place with individuals before any final decision is taken. Keep an open mind on potential option e.g. if two people offer to job share and this represents a cost saving it will be worth considering even for a work trial.
Alternative Employment Options
During the consultation stage, those employees at risk must be provided with details of any alternative employment opportunities available.
Statutory Redundancy Pay
Employees with more than 2 years’ continuous service have the right to receive statutory redundancy pay. This is calculated depending on their age, length of service and original weekly pay.
Notice and Other Entitlements
Where notice of redundancy is served, notice is paid to employees. If the contractual notice period is more generous than the statutory notice period (one week for each complete year of service up to a maximum of 12 weeks) then the greater of the two calculations will apply.
On termination of employment, employees are also entitled to be paid for any pro rata annual leave which they have not taken.
This can be a difficult situation to manage and if in doubt seek further advice.
Helen McDougall
Helen McDougall HR Consultancy
