To say that the COVID19 pandemic has been challenging to businesses and employees alike is clearly an understatement. Few have been untouched in one way or another by the challenges presented by the pandemic and its repercussions. Following the withdrawal of the support of the Furlough Scheme at the ending of September we are heading towards at best a period of readjustment and at worst recession, if not depression.
Unsurprisingly, in this climate the latest Labour Market Outlook survey conducted by the CIPD indicates that redundancies are set to continue in the next few months, with over a 12% of employers saying that they planned to start cutting jobs in the next few months.
The ONS states
“The increase in UK redundancy rates during the coronavirus (COVID-19) pandemic is faster than during the 2008 to 2009 economic downturn. The administrative and support services industry had the highest redundancy rate in the period July to November 2020, at 35.8 per thousand employees.”
The Government has published a report on the impact of the pandemic in which it states
“The number of people claiming unemployment related benefits fell by 114,800 in the month to June 2021, but remains 1.1 million higher than in March 2020. 2.4 million jobs were on furlough through the Government’s Coronavirus Job Retention Scheme (CJRS) as at 31 May 2021. The number of jobs that are furloughed has been gradually falling since the end of January when 4.9 million jobs were furloughed. Over 11.6 million jobs have been furloughed since the start of the scheme. The fourth grant of the Government’s Self-Employment Income Support Scheme (SEISS) opened for applicants on the 22 April 2021. By 6 June 2021, 2.0 million claims had been made. Some workers are disproportionally economically impacted by the coronavirus outbreak. Workers who are from an ethnic minority group, women, young workers, low paid workers and disabled workers, have been most negatively economically impacted by the coronavirus outbreak.”
Many therefore would be wise to take early advice on how redundancies should be carried out in order to comply with the law, whether they will be the ones making the redundancies or facing redundancy themselves.
Redundancy is an often misused word. The legal definition can be found in statute and occurs in broadly three circumstances: firstly, where there is a closure of a business, second where the employee’s workplace closes, i.e. a branch of the business, and thirdly where there is a diminishing need for employees to do available work.
The primary decision to make redundancies is not one the employment tribunal will look behind, it views this as a commercial issue not a legal one. What is capable of challenge however is the decision to select an individual employee for redundancy over and above another; the process which an employer implements to make redundancies. In this connection some reasons will be considered automatically unfair, for example reasons connected to pregnancy, trade union activities and the assertion of various rights. Other reasons, whilst not automatically unfair may nonetheless render the decision to select an employee unfair. For example, where the criteria used in the selection procedure is subjective or biased or where the employer used the process to give effect to a hidden agenda to dismiss specific individuals. Likewise, selection criteria may infringe discrimination law by indirectly discriminating against employees, most notably on the grounds of age or sex. No doubt the virus will throw up new areas of dispute, such as employers selecting those who refuse to be vaccinated before those who will. Employers often link enhanced redundancy payments to length of service, which may put women and younger workers at a disadvantage.
Even if the selection procedure is fair the consultation, and hence the dismissal, may still be considered unfair if inadequate consultation is provided or the employer fails to properly consider redeployment. If an employer is making collective redundancies (that is making more than 20 people redundant in any 90 day period) a mandatory 30 consultation period applies. If an employer is making more than 100 people redundant in any 90 day period the consultation period is 45 days. Other statutory requirements also apply, such as the requirement to notify the Secretary of State for Business, Energy and Industrial Strategy if they are proposing to make collective redundancies. (See Notification to the BEIS).
The key therefore to ensuring that a redundancy exercise is carried out lawfully is in ensuring the process and procedure is fair. The first step is to start the consultation at an early stage, when the proposals to make redundancies are still in the formative stage and in good time for employees to participate in the consultation and if need to be look for alternative employment. Employers who ambush employees with redundancy notices without prior consultation are likely to face challenges in the employment tribunals, which could prove extremely costly and to a business already facing financial difficulties could be fatal.
ACAS have produced a useful Guide on how to conduct redundancies which you can access here.
If you are planning to make redundancies, or face redundancy yourself and are unsure of next steps, call us on 0203 8587965 or 01273 839488.