For those of you with good memories, you will recall that this time last year we were talking about the end of furlough on 31st October 2020 and what impact that would have on businesses. Well, here we are, another year on and with the Coronavirus Job Retention Scheme (CJRS) or ‘furlough scheme’ coming to an end on 30th September 2021, many businesses will be faced with some difficult decisions ahead, including the need to make redundancies.
The latest official government statistics show that there were 1.6 million staff on furlough on 31st July 2021, which is a decrease of 340,000 jobs from 30th June when there were 1.9 million. The number of people on furlough reflects the easing of restrictions that we have seen in the UK over the summer months, but whether those members of staff have returned to their previous roles or have been made redundant is perhaps more difficult to determine. However, in the period April to June 2021 there was an increase in the employment rate and a slight decrease in the unemployment rate which is hopefully a positive sign of increased economic activity in the UK.
BRINGING STAFF BACK TO WORK
If your business has survived or even thrived through the various lockdowns, bringing staff back to work from furlough may have been taking place for some time, but bringing the entire workforce back will be costly. You will need to refer to any furlough agreement in place that should set out the process by which you will ask staff to return to work but if it doesn’t, you will need to ensure that you give staff reasonable notice to return.
As staff return, you will need to plan how you will facilitate this, including in relation to your health and safety obligations as an employer and the duty to provide a safe workplace. For staff that have been on furlough for some time, they may be anxious about a return to work which you will need to be aware of and consider what support can be offered, including perhaps a phased return to the office or adjusting their hours to avoid busy commuter times on public transport.
REDUCING YOUR STAFF COSTS
If bringing all staff back from furlough on their existing terms and conditions isn’t financially possible, you may be forced to consider ways to reduce your costs, but redundancy isn’t the only option available and should be your last resort. Before starting any redundancy process, you should always consider whether there are any other ways in which your business could save money in order to avoid the need to make any roles redundant including:
- Rearanging working patterns – this could include a recruitment freeze, reducing overtime, offering sabbaticals, career breaks or considering job shares
- Retraining and redeploying staff to other areas within the business
- Temporary lay off
- Short time working
- Pay cuts
Before taking any of the steps above you should always take legal advice as it will be important to consider what is and isn’t permitted under an employee’s contract of employment and your organisation’s policies and procedures in order to avoid further complaints or potential claims from employees. But what if redundancies are the only option for your business?
WHAT DO YOU NEED TO THINK ABOUT BEFORE STARTING A REDUNDANCY PROCESS?
1. Are there are alternatives to redundancy that have not yet been considered?
2. Is there a genuine redundancy situation? This could be when a business is closing, a particular office or place of work is closing or where there is a reduction in the need for work of a particular kind to be done.
3. Do you have a contractual redundancy procedure specific to your business, whether express or implied, that must be followed?
4. If your employees are working remotely, are still on furlough or perhaps on maternity or paternity leave, you will need to ensure that they are included in the process. With the majority of restrictions now removed, redundancy meetings will generally now be held in person again but there may be circumstances which mean that you consider holding some of the meetings using video or telephone conferencing such as zoom, Microsoft teams or skype.
5. How many employees are affected by the proposed redundancies? If it is proposed that 20 or more employees are to be made redundant at one establishment within a 90 day period or less then the collective redundancy obligations will apply and the period of consultation will be either 30 or 45 days, depending on the number of affected employees.
6. All employers will need to follow a fair procedure involving individual consultation and make dismissal decisions that are fair and reasonable in the circumstances in order to avoid claims for unfair dismissal. In particular, you will need to:
- Warn and consult employees, or their representative(s), about the proposed redundancy.
- Adopt a fair basis on which to select for redundancy, identifying an appropriate pool from which to select potentially redundant employees and where required, assess employees against fair and often objective criteria.
- Remember that it is the role that is being proposed as redundancy, not the individual.
- Consider any suggestions to avoid the need for redundancies that may be proposed including job sharing or reduced working hours.
- Consider suitable alternative employment within your organisation.
7. Calculate what payments affected employees will be entitled to including notice pay, redundancy payments and accrued annual leave
8. Consider what support you can offer your employees who are given notice of redundancy. Do you have an employee assistance programme or access to a counselling service through a private medical insurance policy? Being made redundant is a stressful time for anyone, so the way that you handle a redundancy process will be important for both your employees who are leaving and the employees who remain.
DIFFICULT DECISIONS AHEAD?
Managing your employee’s return from furlough and any subsequent redundancy process will inevitably result in challenges for your business and your managers as they deal with the issues first hand. If you have any questions about employees returning to work, redundancy, the end of furlough and how to manage the process, please contact Julie Edmonds, Head of Employment, by email jedmonds@jpclaw.co.uk, or telephone 0207 644 7286 or contact her on LinkedIn.
