Kate Palmer, Associate Director of HR Advisory at Peninsula
Redundancies are an unfortunate necessity for many businesses currently. But during the COVID-19 pandemic, they are sadly becoming more common as business owners have to let more employees go to cope with changing levels of demand and the winding down of the furlough scheme.
A redundancy situation can exist where a business, or part of it, is shut down completely, at a specific location (even moving to a new location), or the requirement for employees to do work of a particular kind has reduced or come to an end. There are numerous legal claims employees might bring concerning redundancy, which is why it is essential to plan all redundancy exercises carefully and follow a full procedure.
Given the global economic situation caused by the coronavirus pandemic, companies who are considering making redundancies are exploring the option of doing so virtually. However, employers must be careful not to avoid using the full redundancy process.
Various steps will need to be considered in any redundancy exercise. These are:
- careful initial planning and preparation
- considering if there are alternatives to redundancies
- notification to the Department of Business Innovation and Skills on form HR1 if there are to be more than 19 employees affected
- collective consultation will be required in all cases where more than 19 employees are affected but should be considered even in smaller exercises
- statutory duties to consult and inform appropriate representatives of affected employees
- the method and unit to be used for selection along with the selection process
- individual consultation will be required in all cases
- ending the contract of employment through the proper use of notice or payment in lieu of notice
- the payments that will be due to any employees who are made redundant
- offering a right of appeal to anyone who is selected for redundancy
Holding consultancy meetings, whether individual or collective, is crucial to the redundancy process, which begs the question of whether it would be fair and legal to hold these meetings virtually. The simple answer is yes. Given that this is unchartered territory, the law doesn’t explicitly outline that a redundancy process cannot be conducted virtually. However, there may still be some disadvantages as well as advantages to doing this.
While there are pros and cons to a virtual redundancy process, there are at least three different methods of online communications that employers may be inclined to explore – email, telephone or video link.
The last option, using a video link, according to reports, is the best method of the three. Although it can be daunting to conduct a redundancy process this way – it can also force employers to be blunter, and may be taken less seriously than a face-to-face meeting – it is still the most personable of the other two options as it can help to reduce the anxiety that could build up from the process for both parties and help employers to build understanding and empathy towards affected employees.
Face-to-face consultations will likely always be the go-to approach where possible; however, in the meantime, it is safe to assume that virtual redundancies might become commonplace for the foreseeable future. Some employers may still be able to hold face-to-face consultations though, as long as the proper social distancing measures of 1-metre-plus is observed, and the environment where the consultation meetings are taking place is COVID-secure.
The bottom line is that the pandemic has created a lot of grey areas, affecting our day to day lives as well as employers’ businesses. Still, employers need to ensure that contravening laws on redundancy does not result from any such grey areas caused by the pandemic. To reiterate, a proper redundancy procedure should always be followed regardless of the current coronavirus situation – or whether the employee is on furlough, annual leave, or family leave etc.
As already mentioned, the proper procedure to be followed must consist of a consultation with the employees in question whose job is being made redundant. Still, first employers should always explore alternative options to redundancy and allow employees to contribute suggestions, for example:
- introducing a freeze on recruitment
- reducing overtime
- reducing the use of temporary workers being hired
- re-training employees into other areas (redeployment)
- reducing sub-contracting
- temporary lay-offs or short-working (more information can be found on our employment law pages)
- changing terms and conditions to reflect a wage freeze, wage cut, reduction in bonus or pension contributions