The job retention scheme which is currently providing support towards the salaries of furloughed employees is due to end on 31 October 2020 and the new Job Support Scheme will follow from November for six months, reducing the level of financial support for employers.
Some businesses are already looking hard at their structure and in some cases making difficult decisions around their staffing requirements, identifying that changes are needed to allow them to come out of the pandemic with the ability to recover.
If you are in a position where you are considering making redundancies in your business, here are 5 things to think about:
1 - Genuine reasons for redundancy
Legally, there are only 3 genuine reasons to make redundancies which are as follows:
- The business will cease trading
- The business will no longer operate in a certain location
- The business has a reduced need for a certain skill/role within the business
You will need to be clear which of these reasons applies in your business specifically. However, before you take any action to start a consultation you should always consider whether there is anything that can be done to reduce or take away the need to make redundancies.
2- Potential alternatives to making redundancies
There may be something else that can be done to preserve jobs, taking away the need to make redundancies. Firstly, you should consider whether the government scheme which will be in place until the end of April 2021 can enable you to retain your employees by reducing working hours and pay temporarily. Is there an opportunity to support employees looking to retire or who want to reduce their working hours to suit their own circumstances which may help you to reduce your salary spend and take away the need for redundancies. Also, could placing a freeze on any
recruitment activity and removing the use of overtime achieve your financial goals without the need to reduce your team size.
3 - Making sure the redundancy process is fair?
If you have explored all options and identify that a redundancy process is needed, you must ensure the process used to reduce your workforce is fair and legal. Redundancies are complex and require a robust process to be put in place and followed to avoid the potential of claims from disgruntled employees around unfair dismissal.
4 - Consulting with employees
To deliver a “fair” redundancy process employers must selected those placed at risk of redundancy fairly, carry out a meaningful consultation and use tangible criteria to select who is retained and who is selected for redundancy. In addition, “at risk” employees must be offered the opportunity to be considered for other vacancies in your business where available.
5 - Costing out redundancies
Employees who are selected for redundancy are entitled to receive redundancy pay if they have 2 years service or more. Statutory redundancy is calculated based on an employees length of service, age and weekly pay amount. They may be entitled to more than this if your Company offers any enhancements around redundancy packages. In addition to redundancy pay, employees would also be entitled to receive pay in lieu of holidays accrued but not taken at the point of leaving the business and also pay for their contractual notice period, during which time
you may or may not require them to work.
I hope that you have found this blog useful if you are considering redundancies in your business. Carrying out a consultation process is complex with many factors to consider, if you need help and support with this get in touch with me by email at kat@blackkat-hr.com to arrange a short confidential exploratory conversation. I have a wealth of knowledge and experience in this area making me well placed to help you achieve the right outcome for your business with minimal risk.
