Redundancy and the Coronavirus: Is it the only option?

As the world slowly begins to recover from the Coronavirus pandemic, many employers and employees still face a massive amount of uncertainty. Although the job retention scheme has likely saved many businesses across the UK, as we adapt to the ‘new normal’ redundancy is likely to be at the forefront of people’s mind.

Redundancy is potentially a fair reason for dismissal and usually takes place for one of the following reasons:

• The employer is ceasing or intends to cease to carry on the business for which the employee is employed or where the employee is employed;
• The type of work for which the employee is employed has ceased or diminished or is expected to do so.

Although redundancy may seem like the obvious answer, it should be the last resort. It is always important that all other options be considered, for example, pay freezes, job shares or shorter working hours.

Once all of these types of options have been exhausted, then redundancy may be the only option.

Stage One in the redundancy process

The first stage of the redundancy process is to determine the selection pool. There is much case law around this subject, and if not done correctly, it can lead to successful claims of unfair dismissal.

It’s essential to ensure that selection pools are not discriminatory, for example, only including part-time employees or those close to retirement age. In most instances, the pool of selection will include those who undertake similar work, those in a particular department or those at a relevant location.

An essential part of the redundancy process is consulting with all employees that are at risk of redundancy. This part of the process must be completed regardless of the number of people in the selection pool. Consultation allows all parties to understand the selection criteria, ask questions concerning the process and discuss potential suitable alternative positions within the organisation.

The number of employees at risk of redundancy will determine how the consultation process is completed. If the number is below 20 at one establishment, then individual consultations can take place; however, all employees do have a legal right to accompaniment. This means that they can have a trade union representative or colleague present during the consultation meetings.

If there are more than 20 employees, the process will be slightly different and will involve a collective consultation with either a recognised trade union or elected employee representatives.

So how long does the consultation period need to last?  

There is no fixed timescale as to the length of the consultation period. It does need to be reasonable and long enough to be meaningful rather than just a tick box exercise. There are, however, time limits to when consultation must begin. For example, as mentioned earlier if there are to be more than 20 redundancies at one establishment consultation must begin 30 days before the first dismissal takes effect. If 100 or more employees are to be made redundant, consultation must start 45 days before the first dismissal.

Alternative Positions

Earlier, we discussed suitable alternative positions. This is another area of the redundancy process where many employers fall down.

There is much case law around this subject, and the implications for employers include making sure care is taken when choosing selection criteria for selection pools, and using objective criteria. If an organisation fails to offer suitable alternative employment, then the dismissal will be unfair.

• Case law has stated that employers must consider objectively if the job offered is suitable for the employee.
• This will involve considering skills, wages, working hours, status and location, to name a few. Employees do have the right to a 4-week trial period of a new role if, within that time, the employee decides that they do not want that role, they will still be in a redundancy situation.
• This means that, where eligible, the employee will still be entitled to a statutory redundancy payment.

The right to appeal

Finally, as with any formal process, any employee dismissed by redundancy has the right to appeal the decision. In some instances, employers have argued that the dismissal would have happened anyway even though the correct procedure was not followed.

In a recent case at the Employment Appeal Tribunal, it was concluded that dismissal is not inevitable and that it is impossible to suggest that it would be even if a fair procedure had been followed. It was also concluded that ‘it was substantively and procedurally unfair to deny the claimants their right of appeal and that no reasonable employer would refuse to consider an appeal in circumstances where an employee has a clear right of appeal’.

Getting professional support

As everyone is aware, redundancy is a complicated process to go through, and employees must be supported throughout the process.

It may be necessary to help employees that have been made redundant with interview skills, to update CVs and provide time off during notice periods for interviews.

It would also be prudent to offer mental health support where available and signpost charities which can help provide support and advice in other areas of concern such as debt advice.

When managing a redundancy process, it can be easy to forget about those employees that have not been involved or have not been made redundant. Communication must stay open to all employees as this will help those who are anxious about further job losses and will also help to stop the rumour mill. In doing this, the remaining employees are likely to feel committed and engaged and may be less critical of how the process had been dealt with.

In this blog, we’ve provided a brief outline of the redundancy process; however, it can be complicated.

For more information and advice regarding redundancies, please contact us at Altum HR to discuss how we can support you through a difficult process. Please email us at support@altumhr.co.uk or call on 01925 552333.