Redundancy– Tips for Employers
As employers start making plans for redundancies which may be necessary once furlough ends on 31 April 2021, we highlight some issues which should be factored into the planning process
A fair redundancy process – action points
- Explore all other alternatives before redundancy (eg job share; salary reduction; salary freeze; changing bonus arrangements)
- Have a clear rationale and explanation of the reasons for redundancy
- Identify the correct pool of those who are at risk
- Undertake sufficient/meaningful consultation
- Search for and offer alternative roles
- Apply a fair/objective selection process
- Offer trial periods if relevant
Consultation Process
Employers are obliged to enter into effective and meaningful consultation with employees at risk of redundancy regardless of numbers involved:
- If the employer is proposing to make 20 or more employees redundant within a 90-day period, collective consultation is triggered (in addition to individual consultation)
- Where collective consultation does not apply the employer they must still enter into individual consultation with all affected employees.
Individual Consultation
- There is no set time limit for consultation but
the employer must show that meaningful consultation has taken place - A series of meetings should take place with follow up correspondence
Collective Consultation
- Minimum time limits for consultation must be observed before notice is served
- Consultation must take place with elected representatives or recognised trade unions
- Specified information must be provided to representatives at outset of consultation
- HR1 form to be submitted to the Secretary of State
Common mistakes made by employers
- Lack of clarity about the reason for redundancy
- Incorrectly identifying the pool for selection
- Prejudging the consultation process or carrying out insufficient consultation
- Failing to offer alternative roles
Furlough and notice pay
Employers can use the Coronavirus Job Retention Scheme to reclaim wages of furloughed staff during redundancy consultation. However, neither notice pay nor redundancy pay is recoverable under the scheme.
Claire Cole
(Partner/Head of Employment)
For further advice of any of the above changes or any employment related matters, please contact Claire Cole on 01905 726600 or email Claire.cole@hallmarkhulme.co.uk
The contents of this article are for purposes of general awareness only. They do not purport to constitute legal or professional advice. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.