Going through a redundancy process can be a devastating experience for those affected and needs to be handled sensitively by employers. In addition, conducting redundancies without consideration of the ACAS code of practice could lead to expensive employment compensation claims for the employer.
Meaningful and timely consultation with all employees at risk of redundancy, while continuing to look for alternative options during the process, are essential steps for employers in getting the process right and in doing the right thing by those employees affected.
What is Redundancy
The Employment Rights Act 1996 states that an employee is dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to the fact that:
the employer ceases to carry on the business in which the employee was employed;
the employer ceases to carry on that business in the place where the employee was employed;
the needs of the business for employees to carry out work of a particular kind cease or diminish; or
the needs of the business for employees to carry out work of a particular kind in the place where the employee was employed cease or diminish.
However, redundancy situations can also arise as part of a planned reorganisation, or change in business strategy. It may also be an unavoidable response to an external crisis, such as the current Covid-19 pandemic and it may simply arise because the business does not have sufficient funds to continue to employ its staff.
Redundancy situations can often raise tricky questions for employers. Here are just a few examples:
Can individual redundancy consultation meetings be carried out with employees currently on furlough?
Yes – during the coronavirus (COVID-19) pandemic, employers must still consult with their employees. With agreement between both parties, this can be done remotely as there is no legal requirement to consult face to face.
However, necessary adjustments will need to be taken by the employer to ensure the consultation process is meaningful under remote conditions.This could mean employers providing access and guidance on their choice of technology to those who do not already have it, particularly if the employee does not use such technology in their job. Any likely barriers to meaningful consultation via the chosen technology should be identified and addressed at the earliest opportunity and before consultation begins.
Do employers need to follow a redundancy process during the coronavirus pandemic?
Yes – Regardless of the unusual circumstances due to the coronavirus pandemic, employers are still obliged to comply with their duties and follow a fair process in line with ACAS procedures and this includes carrying out redundancy consultation with all affected employees.
What should be discussed at redundancy consultation meetings?
Consultation must be ‘meaningful’ – this means employers are required to get employee feedback and input, and seriously consider any proposals made by employees to avoid redundancies.
If the business is planning to make 20 or more employees at the same workplace redundant within 90 days it will need to follow ‘collective consultation’ rules. This means consulting with any recognised trade union or employee representatives.
If a collective consultation has already started on a separate redundancy situation in the same organisation, those affected by the proposed redundancy do not have to be included in a new redundancy proposal, but redundancies should not be staggered to avoid consultation.
Planned changes need to be discussed with each employee who could be affected and this can include employees who are not actually losing their jobs.
During individual consultation, employers need to talk with each employee to explain changes and to get their ideas and feedback. The meeting can take place over the phone, or via Zoom or Teams for example, provided both parties agree to it and there is a clear need, such as when and employee works remotely or from home.
The business plans must not be finalised at this stage and employers should aim to include any employees’ suggestions or ideas they agree with.
How many meetings should be held during an individual consultation process?
There is no set number of meetings that must be held, but it is likely that at least two meetings will be needed. This allows the employee the opportunity to consider and respond to the information discussed. It may be that further meetings are required, before redundancy is confirmed, in order to discuss any issues outstanding from the previous meetings or additional thoughts and input from the employee.
Can my business claim furlough payments for employees serving notice?
No, with effect from the end of December 2020, for claim periods from 1 December 2020, an employer will no longer be able to claim furlough pay for employees serving their notice period (whether statutory or contractual notice), including where employees have been given notice of redundancy.
How do I give notice of Redundancy?
Giving notice of redundancy should only take place once consultation has finished and the minimum period of 30 or 45 days has elapsed. Employees must be informed of the following in writing:
their notice period;
their leave date;
how much redundancy pay they are due;
how redundancy pay has been calculated;
any other pay they are owed (for example holiday pay);
when and how they will be paid what is owed;
how they can appeal against the decision.
This is only a small number of FAQs on redundancy and some brief overviews on process. If your business requires dedicated HR support in respect of planned redundancies, get in touch.
For more information on how we can provide you with HR support on any of the HR topics listed here, contact us on 07762 629448, or click here.
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