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Considerations for Redundancy Employment associate Catherine Hawkes provides advice for business owners considering staff redundancies following COVID-19 and explores the typical pitfalls often made by employers Despite the Government’s best efforts to financially support businesses throughout the pandemic, the reality is that a number of employers are struggling with the impact of COVID-19 and may have to consider making redundancies. With the furlough scheme coming to an end in October 20201 this may be a potential consideration for many aesthetic businesses. If this is the case for your clinic, it is important to start planning now, as the consequences of getting the process wrong can be costly. Employees with more than two years’ service have the right not to be unfairly dismissed.2 If an employer is faced with a genuine redundancy situation, redundancy is a potentially fair reason to dismiss an employee.3 However, a fair procedure will need to be followed. This will typically consist of: • Identifying the correct ‘pool for selection’ of employees at risk of redundancy • Engaging in meaningful consultations with affected employees before any decisions are made • Considering suitable alternative employment
For employees with less than two years’ service, a comprehensive process may not always be required and should be considered on a case by case basis. In this article, I will consider the top tips employers should remember when considering and undertaking an individual consultation redundancy process (where less than 20 employees are to be made redundant from one establishment within a 90-day period). Principles governing procedural fairness in redundancy cases in the UK are those established by case law. To ensure that the correct protocol is followed, businesses should consider the following factors when going through the redundancy process.
Assess your reasoning In order for a dismissal to be fair, there needs to be a genuine redundancy situation which satisfies the statutory definition under section 139 of the Employment Rights Act 1996.4 Typical redundancy situations will occur where there is a reduced requirement for work of a particular kind; for instance, where a business is closing entirely or the demand for the work has reduced, or the place where the work is undertaken is changing, meaning
that there is no longer a need for the work to be done in that particular location. Therefore, before commencing a redundancy process, always ensure that redundancy is the real reason for the dismissal. If redundancy is used to disguise the true reason for dismissal, which may be poor performance for example, then any termination of employment for redundancy is likely to be considered unfair which would entitle an employee to bring a claim for unfair dismissal. Some employers may want to consider offering voluntary redundancy in advance of starting a compulsory redundancy consultation process, to enable them to short-circuit the process. However, in order to incentivise employees to apply, the amount offered should be over and above the statutory and contractual minimum payments that the individual would receive if they were made compulsorily redundant. A settlement agreement would also need to be signed by both parties.5 This may be feasible for some employers, but for financial reasons it may not be for others.
Keep a paper trail Employers should consult with employees on the business reasons behind the need for redundancies, and it should be made clear that no decisions have been made until the end of the process. It is therefore important that employers keep a clear paper trail to reflect the fact that no final decisions have been made, for example, through internal emails and file notes. Further, each step of the process should be clearly documented, which will typically mean keeping notes of consultation meetings, as well as written invitation letters and outcome letters which should be provided to employees. If an employee subsequently sought to challenge the fairness of the process, documentation will be vital in disproving this.
Ensure the correct ‘pool’ for redundancies Before the consultation process commences, employers should identify an appropriate pool from which to select potential redundant employees which is fundamental for ensuring fairness.6 When identifying a pool, a good starting point is to consider the specific roles at risk, including any positions which are interchangeable with those roles such as administrative or secretarial duties. It is important that the focus is on roles as opposed to individuals, as this may be seen as predetermining any selection process.
Reproduced from Aesthetics | Volume 7/Issue 10 - September 2020
