Out of lockdown – and into redundancy? Steps to follow when losing staff is the only option

Many employers are feeling the financial impact of the Coronavirus. For some, this has come too close on the heels of a long period of economic uncertainty due to the lengthy Brexit process and for others the impact in their sector has been devastating.

We’ve been helping our clients to take stock and plan for the future, which for many has included looking at redundancy.

If you’re considering the need to make some redundancies, you might find the following tips helpful. And, if you need some more support, please give us a call:

Are there any alternatives to redundancy?

Think about whether there are any actions that you can take to reduce the number of compulsory redundancies that you need to make. For example, you might look at offering voluntary redundancy or consulting with staff about reducing the hours and/or pay. You do not have to take these actions if they do not give you the solution you need, but they may be worth considering.

Do you need a collective consultation?

Identify how many roles/ individuals you may need to make redundant (including both voluntary and compulsory redundancies). If it is 20 or more, there are specific rules that you must follow in relation to electing employee representatives and carrying out collective consultation over a minimum period. If you’re facing this scenario, please contact us for more guidance.

How to carry out selection processes

Identify whether you need to carry out a selection process. This is necessary where you want to reduce the number of people in a pool doing the same or substantially similar roles. You will need to use a selection process to demonstrate that you have made a fair (and non-discriminatory) selection of who might stay/ go from the pool.

The simplest form of selection process is the scoring of staff in the pool against criteria. Where possible, these criteria should be objective and measurable e.g. length of service, disciplinary record, performance against fixed targets, qualifications. Where criteria are subjective e.g. attitude, flexibility, you need to clearly define how you will score them and get two managers to do the scoring to reduce the risk of an accusation of bias.

Try to avoid using absence as a selection criterion if possible as it carries an additional risk of discrimination. If you need to use absence, you must disregard any absences that are known to be or are likely to be related to: disability, pregnancy, maternity or other family leave, time off to care for dependents, time off for trade union related duties or jury service.

Do not use furlough leave as a selection criterion. If someone has been out of the business on furlough leave and you’ve managed without them, then there may be a temptation to say that that person is the one at risk of redundancy. However, you need to look behind that at why they’ve been put/ left on furlough leaves while their colleagues in the same pool have returned to work. For example, have they had less training, are less able to work without supervision, can cover fewer areas, have poorer performance against targets, etc? If so, this may form the basis of your selection criteria

You may not need to carry out a selection process if you’re dealing with a single individual in a unique role in the business (i.e. they’re not in a pool with anyone else), or if you’re planning to make a whole team/ department redundant or close down a site (i.e. the whole pool is redundant).

If you need some assistance in deciding who should be in a pool and what selection criteria to use, please let us know and we’ll help you work it through and draft up some criteria for you.

Consult with your staff before making decisions

You must consult with the staff at risk of redundancy before making any final decisions and should try to remain open minded as to what might come out of that consultation process. Occasionally, staff will have a suggestion that changes the course of what you’re doing – whether it affects only their role or the whole redundancy process. For example, we’ve had staff want to buy a proportion of the business and run it themselves, and we’ve had staff willing to reduce their hours or job-share.

You can consult with staff who are on furlough leave. The consultation process is usually conducted face to face, but in times of shielding, social distancing and furlough leave, you may have to consider whether face to face is the best option for you and them, or whether you might be better off with a video or telephone call.

Using furlough leave to give you more time to make decisions

The government’s furlough leave scheme is set to continue until 31^st October 2020. As things stand, you may use furlough leave: to give you more time to consider whether to make redundancies and plan out your process before you get started; to give you time to carry out your consultation process without feeling rushed; to cover all or part of someone’s notice period; and/or, to extend someone’s employment beyond the end of their notice period up to 31^st October 2020.

Every redundancy situation is different. You need to find the staffing structure that will put you in the best position to go through the uncertainty of the next few months and you need to consider the roles and individuals that you’ll be dealing with as part of the redundancy consultation process. We’re here to help.