We have already seen an increase in our HR manager and business owner clients requiring redundancy support to re-size and re-shape their businesses, as they adapt and recover from the Covid-19 pandemic. Inevitably these change programmes have resulted in redundancies and there are probably a lot more to come.
Making someone redundant can feel like an agonising and heart-breaking decision, especially if the employee is a loyal and valued member of your team. However, redundancies can be carried out successfully and in a way which will not only stand your business in good stead, but also help the employee feel appreciated and looked after. An employee’s experience of a company is just as important when they leave as when they join. Good planning and a clear process is the key to getting their exit to be as positive an experience as possible.
Before any redundancies take place, an employee must be warned and consulted about the possibility of their role disappearing. The consultation process should be a genuine exchange of views and the employer should consider an employee’s representations. As part of that ongoing consultation, it is absolutely essential that employees are considered for alternative vacancies (if there are any), even if they are at a lower grade; making an assumption about an employee’s preparedness to accept a drop in pay and/or status is incredibly dangerous.
If you’re considering making multiple redundancies at a single site or office, the process to be followed is substantially more complex and the financial and other penalties for getting the process wrong, really ramp up. Expert advice is essential.
Here are some pointers:
Individual redundancies/less than 20 employees at the same site/office in a rolling 90-day window
- Give fair warning of any impending redundancies
- When deciding the pool from which to make any redundancies, draw the pool as wide as possible, particularly where employees’ roles and duties are varied / interchangeable
- Consult with affected staff about how to avoid or mitigate the impact of any redundancies
- During the consultation phase, be open-minded and consider the views of affected staff
- Ring-fence alternative vacancies for employees at risk of redundancy
- Ensure any employees selected for redundancy who are on maternity leave are given preferential treatment in respect of alternative employment
Collective redundancies (20 or more redundancies in a 90 day window at the same site/office)
- Representatives of affected employees must be consulted 30 days (or 45 days if there are more than 100 redundancies planned) before the first dismissal (“Collective Consultation”)
- If you don’t have any representatives in place, employee or trade union, you will need to hold some elections first before consultation can start – this can delay the process by 1-2 weeks
- The Collective Consultation process must start before any individual meetings / consultation but does not need to last 30 or 45 days strictly speaking if Collective Consultation is at an end
- Employers must notify the Insolvency Service in advance of the first dismissals taking place by filing an HR1 form for each establishment from which they are making redundancies. Failure to do so can result in a hefty fine and/or criminal sanctions. Note, the HR1 form has been revamped and the new version can be found here.
Vast redundancies are something the Government is trying to avoid with the promise of a £1,000 bonus for each furloughed employee who has been brought back and is still employed at the end of January 2021 under the Coronavirus Job Retention Bonus (CJRB) scheme.
Key points of the CJRB scheme include:
- All employers are eligible for the scheme, including recruitment agencies and umbrella companies.
- A £1000 CJRB can be claimed for each ‘eligible’ employee, including office holders, company directors and agency workers, and those employed by umbrella companies.
- To be an ‘eligible’ employee, the individual:
- must have been furloughed at least once under the job retention scheme;
- must earn at least £520 a month on average between the 1 November 2020 and 31 January 2021 (they must have had some earnings in each of the three months, which amounts to a total of at least £1,560 across the three months);
- must be continuously employed by the employer from the time of the employer’s most recent CJRS claim for that employee until at least 31 January 2021; and
- cannot be serving a contractual or statutory notice period, that started before 1 February 2021.
More information about the CJRB scheme can be found here and further details of the scheme are expected to be published later this month.
Help is at hand
In response to the high demand for first-time redundancy advice, we have pulled together a package of advice and template letters to take employers through from initial announcement of redundancies through to appeal and all stages in between, in a compliant and timely fashion.
If you’re wanting to access this invaluable suite of materials or want to know how we can help guide your business through a planned redundancy exercise, please call us on 01904 437680 or email email@example.com.