The Job Retention Scheme was implemented in March 2020, to help deal with the economic consequences of the Coronavirus.
The scheme has been a success with many businesses furloughing their employees to survive, protecting thousands of UK jobs. But with the end of the scheme in sight on 31st October, 2020, what will businesses do if they can’t afford some of their employee overheads? Unfortunately, redundancy may be something to consider, and if it is the only option, then the usual rules around redundancy and what constitutes a fair process still apply.
But even with this in mind, there are extra considerations to take into account when making someone redundant during or after furlough, as well as during the Coronavirus pandemic, which are detailed below:
When starting any redundancy process you need to go through the process of identifying any job roles at risk of redundancy and, where necessary, creating a ‘pool’ of staff that may be at risk, which can include furloughed staff. in the pool. Don’t think of making the person redundant, but rather consider the role that needs to be made redundant, and this is especially true at the moment, when it might be tempting to think of furloughed staff differently from any staff currently working.
It’s important to note that the Government Guidance confirms that furloughed staff can be still made redundant and that their normal redundancy rights apply. So again, you must not cut corners just because staff are not currently working.
Redundancy selection criteria involving furloughed employees
Drawing up criteria for who to select for redundancy from your pool of staff at risk can be tricky at the best of times. The process needs to be open, fair, and not discriminatory in any way, and needs to be part of your overall consultation process with staff.
With this in mind employers should be especially careful selecting furloughed employees for redundancy, as selecting any employee for redundancy based purely on the fact they are currently furloughed could be open to challenge:
- If you initially used criteria to select which employees to furlough you should not rely on this solely for your redundancy selection process. You should reassess the fairness of criteria again, and consult with staff about this if redundancies are necessary to ensure the criteria and selection process is not deemed as unfair.
- Staff who’ve been furloughed because they are shielding or have caring responsibilities and are then selected for redundancy have the potential to challenge this, as it could be perceived as indirect discrimination on age, sex or disability. As an employer, you should make sure these individuals are not selected for redundancy due to being furloughed for these reasons.
- There could be an argument that it is unfair to make employees redundant while the furlough scheme is still available. However, from August until the scheme ends in October employers will have to make increasing contributions towards employee wage costs, and the affordability of this may be a reason why employers have to consider redundancies now rather than wait until the scheme ends.
Employee redundancy consultations
The rules around consulting staff both individually and collectively for redundancy have not changed, regardless of whether that staff member is furloughed or not. However, what a fair consultation process will look like may be different.
One difference is the obvious logistical issues that may arise from consulting with staff remotely. These consultation meetings should still take place individually and/or collectively but should be done via video, or by telephone if in person via video or face to face isn’t possible. It’s important employers build in extra time for any unforeseen challenges due to this.
Being accompanied at redundancy consultation meetings
Regardless of where the consultation meeting is held, it is good practice to allow employees to have a companion at redundancy consultation meetings and this can still be achieved even if the at risk employee, or their chosen companion, or both, are on furlough.
If employers are proposing to make 20 or more redundancies in 90 days, a collective consultation will be triggered. They will need to ensure they consult with the appropriate union or staff representatives with plenty of time prior to the deadline for commencing consultation.
Payments for redundancy
As mentioned previously employees’ redundancy rights and other employment rights will not be affected even if they are furloughed. Anyone made redundant during furlough with two years continued employment will be entitled to a statutory redundancy payment including any contractual entitlements.
This payment must be calculated based on contractual pre-furlough salary including any untaken holiday entitlement and notice period pay as per their contract.
And lastly, at what is obviously such a stressful time for businesses and employees alike, make sure to show compassion to team members who may be facing redundancy as this process will have a significant impact on their wellbeing and life, especially given the impact COVID-19 has had on the economy.
To help with this, make sure to keep the redundancy process as clear as possible, with regular honest two-way communication and assure these members of staff that their contribution to the business is valued.
If relevant, signpost them to relevant mental health support sites or if you have an employment assistance programme (EAP) remind them of that. Some EAPs offer their services up to 3 months after employment has ended.
And don’t forget to communicate and reassure your other staff who remain with you as redundancy within their teams can be very unsettling.
How we can help
It’s times like these that having an expert HR consultant at the end of the phone can be invaluable to your business. We provide each of our clients with a dedicated person who in this situation will guide you through the process so it’s as pain-free as possible, professionally managed, and legally compliant.
The content of this blog is for general information only. Please don’t rely on it as legal or other professional advice as that is not what we intend. You can find more detail on this in our Terms of Website Use. If you require professional advice, please get in touch.
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