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Workforce planning following changes to the furlough scheme

VWV

The Coronavirus Job Retention Scheme (the Scheme) will remain in place until the end of October with changes from 1 July 2020 requiring increasing employer contributions.

Businesses currently taking advantage of the Scheme need to consider whether pre-crisis structures and employment costs will be sustainable from July, and ultimately, once the Scheme ends. Where it appears that redundancies may be necessary, it is important that employers comply with employment law in order to avoid liability for claims arising.

Employees with two years' continuous service or more have the right not to be unfairly dismissed. In order to avoid successful claims for unfair dismissal, an employer needs to ensure there is a potentially fair reason for the dismissal and that they follow a fair procedure.

Redundancy is a potentially fair reason for dismissal. Businesses will need to consider whether there is a genuine redundancy situation, taking into account the statutory definition of redundancy. For example, is there a reduced requirement for work of a particular kind? In relation to a fair procedure, there are a number of factors to consider.

When Should You Commence Consultation with Employees?

Consultation should be genuine and therefore should take place before a redundancy is a fait accompli. Redundancy should be a last resort and early engagement with employees (or their representatives where appropriate) is best practice. Employers should discuss potential difficulties the organisation faces in the short, medium and longer term and work with employees/employee representatives to identify viable options for mitigating those difficulties.

Do Collective Consultation Obligations Apply?

If there is a possibility that 20 or more redundancies will be required at one location within a period of 90 days, collective consultation will be necessary. Employers will need to take into account the implications of having to comply with the statutory obligations, namely:

  • minimum timeframes for consultation (30 or 45 days depending on the numbers involved)
  • a requirement to inform the Secretary of State
  • informing and consulting employee representatives

How Do You Ensure a Fair Process and Selection?

Collective consultation obligations, if relevant, are additional to individual consultation requirements. Employers must ensure effective consultation with individuals, which may require special arrangements to be put in place (eg video conferencing). Employers should take steps to agree how consultation will take place and ensure that employees can still invoke their right to be accompanied.

Selection criteria must be fair and objective. Employers also need to be mindful of the risks of other claims - including the risk of claims for automatic unfair dismissal and disability discrimination. Employers must not select staff for redundancy because they have raised health and safety concerns. Pregnant employees and those on statutory maternity leave benefit from enhanced protection in a redundancy situation.

Best Practice

In view of the upcoming changes, effective planning may entail developing an appropriate strategy before the end of June. Employers should therefore start considering structures going forwards and the practicalities of how any consultation will now take place. Employers should ensure that a full and fair consultation procedure takes place, including compliance with statutory collective consultation obligations where relevant, and that this is documented. If, following review, there are no proposals to make redundancies, it is sensible to also document this fact.

If you require specialist legal advice on managing redundancies during the coronavirus pandemic, please contact Charlotte Rose in the Employment Law team at award-winning law firm VWV on 07741 311 065, or crose@vwv.co.uk.