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Redundancies – Planning ahead

Industry News

Redundancies – Planning ahead

Changes are coming

As a result of the Coronavirus Job Retention Scheme (CJRS) ending on 30 September, employers will soon need to contribute to the wages of their furloughed staff.  With that in mind, businesses are strongly encouraged to think carefully now about their future, as redundancies are predicted to occur over the next few months. 

The CJRS was introduced as a way to protect jobs and ease the impact of Covid-19 on UK businesses, as a result of which 11.6 million jobs have been supported. However, under the scheme, employers were asked to contribute 10 per cent of an employee’s salary from 1 July, which then increased to 20 per cent in August.

With many companies now facing financial restrictions due to the repercussions of Covid, it is inevitable that workforce requirements will be reviewed to determine if current levels of staffing are viable. Employers who are concerned about the changes to the CJRS scheme may want to think carefully about whether to begin redundancy consultations so that they are in a position to make redundancies before the government funding reduces further. 

Redundancy

If redundancies are inevitable, as a first step, employers can ask if any employees would like to take voluntary redundancy, which may be an attractive option for some and will help keep compulsory redundancies down. 

Legal requirements for redundancy depend on the number of staff affected but regardless, a fair process must be followed. 20 or more employees being made redundant will require collective consultation, meaning consultation with staff through liaison with trade union representatives or elected colleagues. If only a small number of employees are affected, individual consultation should instead take place with employees whose jobs are at risk. The employer should listen to any suggestions that employees have for avoiding redundancies, for example by moving them into a suitable alternative vacancy within the organisation. At the end of the consultation period, employers need to confirm who is being made redundant and whether an alternative to redundancy for certain roles has been found.

Employees who are selected for redundancy are entitled to be given their contractual notice or a payment in lieu, in addition to statutory redundancy pay (if their tenure is over 2 years), which is based on an employee’s age and length of employment.

For more information or advice please get in touch

The UK government website can also provide you with some of the information you may need, click here.

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