Bracing your company for redundancies

The president of the employment tribunals for England and Wales has said that he expects a big increase of unfair dismissal claims by reason of redundancy as the government’s furlough scheme is wound up.

We know that for many employers the furlough scheme has simply been a means of delaying the inevitable. With changes to the scheme being imposed from as early as July, and employer contributions becoming compulsory from August, we know that many clients will be considering their options with regard to redundancies.

Employers need to be careful to ensure they follow a proper redundancy procedure to reduce the likelihood of any sort of employment claim. The most obvious claim for employees with over two years’ service could make a claim for unfair dismissal.

However, employers could also be vulnerable to discrimination claims if an employee believes that their redundancy is due to a protected characteristic.

A fair and reasonable procedure would include:

  • Consulting with employees about the proposed redundancies
  • Having a fair method of selection in place
  • Proper consideration of alternative solutions to redundancy

Special considerations need to be made when employers are considering making 20 or more employees redundant within a 90 day period. In this situation an employer has a duty to inform and consult appropriate representatives of the affected employees. The employer must also notify the BEIS of the proposed redundancies. Failure to follow these steps can lead to each affected employee being entitled to a protective award which is a maximum of 90 days’ gross pay. Furthermore, failure to notify the BEIS is a criminal offence and you could be subject to an unlimited fine.

It is therefore crucial that as an employer you do all that you can to carry out a fair and reasonable redundancy process. Our team is on-hand to provide you with advice about how to conduct this process which can include drafting scripts for meetings and letters to employees. Please do not hesitate to get in touch if this is something you would like assistance with.