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Due to the impact the Coronavirus has had on the workplace, many employers are seeking instructions on how best to go about engaging in a fair redundancy process, particularly considering the Coronavirus Job Retention Scheme (more commonly referred to as ‘Furlough’) is due at the end of September 2021. Our lawyers have put together some advice for you.
Recent guidance from the Employment Appeals Tribunal (EAT) in Berkeley Catering Ltd v Jackson highlights that the first consideration in any redundancy process is whether the dismissal is actually because of redundancy. Employers must be aware that making an employee redundant must be wholly or mainly attributable to the fact that the changing requirements of the business mean the employees work has diminished or ceased to exist.
Firstly, dismissal over your performance or conduct is not grounds for redundancy. Concerning the workplace during times of COVID-19, taking time off work for illness, furlough or isolation later affecting your performance would therefore not fall into the category of a basis for being made redundant.
If your employer calls upon you to speak about a redundancy programme at work, there is no reason as to why you cannot raise alternative options. Voluntary redundancy is often used for ease of both employer and employee. Opting for this route can sometimes encourage the employer to pay out a higher redundancy pay rate. Discussing a change in working hours, as well as taking on a different role in the company are all valid options to discuss at a redundancy consultation. Please note, your employer does not have to agree to an alternative option, though by law they are required to seriously consider these.
The same notice periods by law are still applicable in times of crisis, such as when there is a pandemic. This means that you are entitled to receive the minimum statutory notice period. These can be found at https://www.gov.uk/redundancy-your-rights/notice-periods and are based on how long you have been working for your employer. Note that some employment contracts may include longer notice periods and, in these situations, you are entitled to receive your contractual notice, so this is worth checking.
An employer is legally obliged to pay the legal minimum amount to employees who have worked for them for at least two full years. This requirement is still standing during COVID-19 and also includes those who have been on furlough. Employees who receive 80% of their wage due to being on furlough will be entitled to have redundancy pay calculated based on their full salary. Redundancy pay is calculated depending on age and how long the employee has worked for the organisation. Note that the limit is capped at 20 years, so an employee who has worked for the organisation longer than this period will have their maximum total statutory redundancy pay limited to £16,320.
An employee will be allocated a reasonable timeframe by their employer to appeal being made redundant. 5 days is an average ‘reasonable time’ that employers will allow for an appeal. You should give your reasons as to why you are appealing in writing and a senior employee who was not involved in the redundancy decision-making process will lead the meeting with you and your employer.
Employers must follow the correct selection process if the organisation is looking to make someone(s) redundant. Not abiding by this procedure greatly increases the chances of an unfair dismissal claim being bought on behalf of an employee.
Each selection pool of employees should include roles that are the same or very similar. The criteria for selection should be as objective as possible and should be fact-driven rather than opinion-based.
Common examples of the selection criteria in these instances include standard of work performance, attendance, skills, experience, qualifications and disciplinary records. Any characteristics based on subjective opinion could result in a discrimination claim. Therefore, redundancy due to age, sex, pregnancy, mobility etc should be avoided completely.
The obvious discriminatory characteristics in UK law are not grounds for redundancy, though employers should pay careful attention to characteristics that may not be so apparent. Part-time/full-time job basis, concerns about competition and whistleblowing, as well as pay and hours worked could all be seen as discriminatory grounds under UK legislation.
An organisation may have a specific redundancy process that it must follow, so it is important to check this. Organisations may also have a collective agreement with a Trade Union on what must be done in these instances.
In all redundancy situations, consulting staff is necessary. A redundancy plan should be made and shared with all staff, highlighting the options the organisation has considered before redundancy. Staff should be made aware of how many employees will be made redundant, the timescale of the process and any statutory or contractual notice period.
During COVID-19, the consultation can be done remotely. This may prove more difficult when the organisation needs to arrange a collective consultation, which is needed when over 20 employees are to be made redundant within a 90-day timeframe.
Notice of redundancy must be given to your employees within a reasonable timescale and, if appealed, a meeting invitation should be sent out as soon as practically possible.
If the organisation does decide to make an employee redundant and it is not appealed, redundancy pay must be made no later than the employee’s final day. Note that where there is written consent from both employer and employee, this can be delayed.
If your organisation cannot afford the redundancy pay or by paying the organisation will be put at risk, the Redundancy Payments Service can offer financial help.
Due to COVID-19, it is a good idea for employers to avoid the process of redundancy completely. A higher number of alternative options are in place currently than there ever has been before: furlough being the most obvious example (although only until the end of September 2021).
Offering alternative employment to workers is a good way to avoid the need for redundancy. If an employee has a valid reason for refusing the alternative job offer, for example: location, pay or experience, then you as the employer will still be required to pay their redundancy pay in full.
However, if the employee does not have sufficient valid reason for refusal, you can refuse to pay their redundancy pay. This would be based on proof that the employee’s decision was unreasonable if they were to claim an employment tribunal.
Overall, the UK Courts and Tribunal system looks seriously at reasons for dismissal in the workplace. This is ever more crucial in today’s climate where alternative options are in place to avoid such redundancies, such as furlough. If the selection process is unfair, then employees are well within their rights to appeal. Employers must be careful with following correct redundancy procedures, specific to their organisation if they are to avoid an unfair dismissal claim or even a discriminatory based claim.
If you are an employer or an employee looking for more advice on workplace or employment redundancy, contact our lawyers today. Our employment law specialists are here to help with your queries and help you settle disputes.
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