With job losses continuing to hit the headlines and one in three firms reporting a likelihood of having to make redundancies over the next three months, many admit they are unaware of the rules surrounding the consultation process, particularly in lockdown.
Despite the challenges of COVID 19, it is important for employers to ensure the correct procedures are followed and communication is properly maintained when such a decision has to be taken remotely.
Mitigating the risk of claims for unfair dismissal is key. Successful claims can entitle employees to compensation of up to 52 weeks’ gross pay (subject to a statutory cap) and, even if unsuccessful, require significant resources of time and money to defend.
Careful planning of the redundancy process will reduce the risks of such claims being brought.
Timing of consultation
• If you are proposing to dismiss less than 20 staff, there are no set rules around when to consult, or for how long, but full and proper consultation is important to ensure the redundancy is not unfair.
• If you are proposing to dismiss 20 or more employees in a 90 day period, a 30 day consultation period, before the first of the dismissals takes effect, is required.
• The consultation period rises to 45 days if 100 or more dismissals are proposed.
Purpose of consultation
Consultation should be carried out with a view to reaching agreement with the employees on the matters discussed and should cover:
• The way in which dismissals can be avoided or the number reduced, such as pay cuts or reductions in hours.
• The way in which employees will be selected for redundancy.
• The fact that voluntary redundancy can be offered as way to avoid compulsory redundancies.
Consultation during COVID
• Consultation should start as early as possible and before firm decisions have been made. If businesses are aware that job losses are already required or are likely to follow the winding down of the furlough scheme they should start to consult with their employees as early as possible.
• The pool of affected employees must be made regardless of whether an employee is on furlough or not. Although the fact that an employee has been furloughed may indicate that their role is not essential, employers should ensure they do not automatically place all furloughed employees into the pool for selection.
Certain groups, such as women and those who are clinically vulnerable, are more likely to have been furloughed due to childcare or medical reasons, which could lead to claims for discrimination if they are automatically selected for the pool.
• Use criteria that are as objective as possible and ensure two managers are scoring. Potentially redundant employees should be given the opportunity to challenge their selection for redundancy and suggest alternatives and, where possible, alternative roles should be sought within the organisation or any wider group.
• Video-conferencing is the best substitute for face to face consultation. Once lockdown has eased to the extent that we can safely meet in person, discussions as significant as one regarding redundancy should where possible be held in person. However, in the absence of face to face, conferencing via Zoom, Teams or the equivalent is the only acceptable method – redundancy via email or a phone call will land you in hot water!
• Employees should also be given the right to appeal against their dismissal. This should be heard by someone in the organisation who has not been involved in the redundancy process.
Five principles for employers to consider if they are facing tough decisions in the coming weeks.
Do it openly: whatever the scale, the sooner people understand the situation, the better for everyone.
Do it thoroughly: offer employees the information and guidance they need to make decisions.
Do it genuinely: consultation means hearing people’s views before you make a decision, so be open to alternatives from individuals and always give feedback.
Do it fairly: organisations must ensure that the procedures take place without any form of discrimination.
Do it with dignity: the way you let people go says a lot about your company’s values. Employers must think carefully about how they handle these conversations, whether face-to-face or remote.
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