Despite the Coronavirus Job Retention Scheme coming to a close at the end of September, lawyers warn that planning redundancies should begin now.
New research published by the Government shows that the Coronavirus Job Retention Scheme has supported a cumulative total of 11.6 million jobs since March 2020.
However, with new changes to employer contributions already coming into force, law firm Nelsons has warned that businesses should start planning ahead and thinking carefully about redundancies.
Laura Kearsley, partner and solicitor specialising in employment law at Nelsons, discusses the minimum consultation periods which must take place before redundancies take effect:
Faced with uncertain trading times for many businesses and now partial financial responsibility for all employees, many employers will need to review their workforce and requirements to consider whether current levels of staffing are sustainable.
If an employer intends to make more than 20 people redundant, this triggers collective consultation requirements, including minimum consultation periods during which redundancy dismissals cannot take effect. The consultation period for employers who anticipate making 100 or more people redundant is 45 days and for those anticipating making between 20 and 99 redundancies it is 30.
As such, Ms. Kearsley urges businesses to think about commencing redundancy consultations so they are in a position to make redundancies before the government funding reduces.
This includes complying with the requirements of collective consultations which involve liaising with recognised trade unions or elected employee representatives.
Furthermore, employers that are making any number of employees with more than two years’ continuous service redundant will need to adhere to minimum requirements in terms of consultation and meetings.
Ms. Kearsley clarifies that the legal obligations on employers who are thinking about redundancies will depend on how many staff they are planning to let go. She stated:
If you anticipate that you will have to make 20 or more people redundant at the same location within a set period, you will have a legal obligation to consult with employee representatives (these could be trade union representatives or colleagues elected for this purpose).
Regardless of the numbers, you should also follow a fair process where you meet with employees that are at risk of redundancy and listen to any suggestions the employees have for avoiding redundancies.
As such, Ms. Kearsley outlines the importance of consulting properly with staff at risk of redundancy before reaching a final decision.
This will involve holding meetings with employees to discuss the situation in more detail. At the end of the consultation period, employers will need to confirm who they are choosing to make redundant and whether an alternative to redundancy for certain roles has been found.
The Institute for Fiscal Studies (IFS) has warned that millions of people and their employers will be affected by the phasing out of the furlough scheme, with rising redundancies taking place over the summer months.