Implementing Redundancies Due To COVID-19

On 29^th May, the Chancellor announced more details around the extension of the Coronavirus Job Retention Scheme (CJRS) which will now finish on 31^st October 2020.

Collective redundancy consultation

Prior to the announcement earlier in May, the Government came under increasing pressure to avoid the so-called ‘cliff-edge’ of some employers having to begin collective redundancy consultation. Where an employer proposes to make 100 or more employees redundant at one establishment within 90 days or less, it must begin collective consultation at least 45 days before the first redundancy takes effect. Had the CJRS not been extended, employers seeking to cut 100 or more jobs would have had to have started collective redundancy consultation by 18th May 2020 in order for dismissals to take effect upon the closure of the CJRS in June. You can read our blog about collective redundancy consultation here.

Hopefully, the CJRS will have the desired effect of preserving many jobs until businesses are able to restore their workforces. The major concern, of course, is that with the Government warning of a ‘significant recession’, employers will be forced to consider making employees redundant when Government funding of the CJRS reduces. Indeed, despite the CJRS being in place, several companies (including Virgin Atlantic and British Airways) have already announced large-scale redundancies as a result of COVID-19.

Depending on the number of redundancies proposed, collective consultation duties may apply (as mentioned above). In every case, however, an employer should engage in some level of individual consultation with those at risk of redundancy.

The principles of fairness in a redundancy context come from case law. In general, an employer will not have acted reasonably (and a dismissal will therefore be unfair) unless it:

• Warns and consults employees about the proposed redundancy. This means consulting when proposals are at a formative stage, giving employees adequate information and time to respond, and giving proper consideration to responses to the consultation.
• Adopts a fair basis on which to select for redundancy. An employer should identify the appropriate group of employees from which to select those who are to be made redundant. Any selection for redundancy ought to involve the fair application of objective selection criteria.
• Consider suitable alternative employment. An employer must look for and, if it is available, offer suitable alternative employment within its organisation.

We would encourage employers to follow a fair and reasonable redundancy process in every case. From a legal perspective, however, it is crucial that they do so where the employees concerned have two or more years’ continuous service and, thus, the right to claim unfair dismissal.

The importance of planning

The unprecedented nature of the COVID-19 pandemic, and the extraordinary measures taken to combat it, make it difficult for employers to look too far ahead. Wherever possible, however, we would urge employers to plan. This will involve:

• Identifying whether there is likely to be a redundancy situation when the Government funding for the CJRS reduces or when the Scheme closes and, if so, which employees are at risk.
• Ensuring that managers involved in the process understand the employer’s legal obligations and are able to hold meetings with (and provide support to) those at risk of redundancy (in many cases, this will need to be done by online conferencing, telephone and email).
• Checking that HR records are sufficiently comprehensive to rely on for the basis of scoring employees against any selection criteria.
• Drawing up a list of proposed selection criteria, including appropriate weightings.
• Ensuring that all affected employees are considered and involved in the process. At the best of times, some employers may overlook by mistake employees who are absent from work (e.g. those on long-term sick leave or family-related leave). At the moment, with normal working patterns disrupted and many people working remotely, individual absence might be less obvious than would usually be the case.