Avoiding Redundancies. What Can Employers Do?

With the Coronavirus Job Retention Scheme due to close at the end of October, employers may already be considering if job losses could be on the horizon, and if steps can be taken to avoid job losses.

Many large employers, such as British Airways, Hays Travel and WH Smith have already announced job cuts. Citizens Advice has said it has seen an increase in demand for redundancy advice, and ACAS reported that calls to its redundancy advice line nearly tripled in June and July. Unfortunately, with Government support to businesses diminishing and with the continuing effect that the coronavirus pandemic is having on business, the next few months are unlikely to be much different. A recent research study has even suggested that as many as one in three UK employers expect to make staff redundant between July and September.

We at Collingwood Legal have a wealth of experience in managing redundancy situations and are here to tell you that it may not be all “doom and gloom” for employers. There are lots of options which employers could, and should, have in mind before taking the decision to make compulsory redundancies. We have set out some examples below:

-Agreeing flexible working with employees such as working reduced hours or job shares;

-If contracts of employment permit it, asking employees for a short period to stop working (temporary lay-off) or work reduced hours (short time working);

-Reducing overtime, or stopping it altogether;

-Providing retraining for employees to do other jobs within the organisation;

-Offering voluntary redundancy or early retirement to all employees; and

-Putting a freeze on recruitment.

As well as these options potentially having the positive effect of avoiding compulsory redundancies, from an employer’s perspective, it is important that the above options, as well as any other alternatives to redundancy, are seen to considered when conducting a fair redundancy process. This is because should an employee bring a claim to an employment tribunal, a tribunal would look at what efforts the employer made to pursue alternatives to redundancy.

Should after exploring ways to avoid compulsory redundancies, they cannot unfortunately be avoided, then an employer must ensure that it carries out a legally compliant redundancy process notifying employees that they are redundant. Broadly this includes:-

-Identifying the business case for why redundancies are necessary;

-Warning and consulting with the affected employees;

-Fairly identifying and selecting employees from an appropriate selection pool; and

-Searching for and, if available, offering alternative employment.

If an employer proposes to dismiss twenty or more employees as redundant within a period of 90 days, then there are additional strict requirements to carry out a collective consultation.

Making redundancies is often a challenging time for all concerned, and with employees potentially struggling to find new employment in a difficult job market, loss of earnings’ awards for successful unfair dismissal claims are likely to be more significant, and employees may be more likely to challenge the dismissal. Careful planning and management, particularly exploring ways to avoid or reduce redundancies, is therefore recommended before embarking on a redundancy exercise.