As the furlough scheme is changing and employers are expected to start contributing from 1 August 2020, we are seeing lots of businesses looking at restructuring and/or redundancies. Those looking to make more than 100 employees redundant will need to ensure that they factor in at least a 45-day consultation process. Businesses making more than 20 redundant within a 90 day period will need to ensure that there is at least a 30-day consultation process.
If you have employees on furlough existing employment law will still need to be adhered to but you are still able to start the redundancy process.
Redundancy is a stressful and emotional time for not only the employee but the business too. Trying to run the business whilst going through redundancies can be particularly challenging. This subject is a vast area, but the below points are some key areas which can sometimes be forgotten about and if not considered can be very costly for a business.
Redundancy or Performance?
It is the role you are making redundant, not the person. It can be common for managers to think a role is not required anymore when the person carrying out the role is not performing. Is it a performance issue? If so manage it that way! Don’t confuse the two.
Contracts of employment
Check contracts of employment for notice periods required. Be mindful of those employees that may have been transferred from another business and may have different terms to others. Always check and budget for this!
Check alternative options to redundancy. Can their skills be used elsewhere in the business? If someone has been with the company for 25 years their experience will be invaluable. Are there any mentoring or training opportunities they can slot into? Have you considered reduced hours, or more flexible working as alternatives.? Redundancy is a costly option.
Make sure you contact your employment lawyer before starting a redundancy process. Many businesses proceed with their redundancy process and when issues arise call the lawyers. However, this is usually more costly for the business. Your lawyer can help identify any legal pitfalls you need to be made aware of, advise on the company’s legal obligations and most importantly advise on any commercial considerations to ensure the company achieves its objectives. Ensure that the person carrying out the redundancy procedure knows what they are doing and they have prepared.
Managers must be trained. Lack of efficient skills and not understanding the implications of a poorly managed redundancy process may result in a company being taken to tribunal! Knowing what you can and can’t say in a redundancy process is key and knowledge of the procedure is important in managing employee expectations. Enhancing communication skills and managing conflict will also help for a more smooth and less stressful process. HR should be there to support and guide managers throughout.
Employees left behind
Think about those who are left behind. Employees who were not chosen for redundancy are often forgotten about as the focus is understandably with those who have been made redundant. However, their role is integral for the “business as usual” stance and continuity of service to your clients and customers. Those employees may feel uncertainty, which may manifest in low morale, increased absenteeism and decreased engagement with the business which ultimately may lead to them looking for a job elsewhere. You don’t want to lose these people and their skills! Managing change will be key here and the role of the line manager! This is where HR support is invaluable. Whether you have support in house and need an extra pair of hands or if you need more of a on-site approach our HR Specialists can ensure there is a smooth transition.
If you are looking at redundancy, get ahead and get in touch today to speak to our employment law solicitors and/or HR consultants to make sure you do not make any costly mistakes!