Following the end of the furlough scheme later this year, experts have warned of an increased risk of litigation as redundancies loom large. 

According to Renovo, an outplacement firm, employers must be mindful of how they approach redundancy processes to avoid litigation claims.

The heightened number of litigation claims are expected to arise following the end of the Coronavirus Job Retention Scheme in September.

During the pandemic, the scheme has supported roughly 11.5 million jobs from 1.3 million employers. However, it is forecast that the ending of this scheme will lead to the number of job losses to rise, with the Office for Budget Responsibility (OBR) predicting unemployment will climb to 6.5 per cent by the end of 2021.

Analysis by insurance broker Gallagher found that almost two-thirds (64 per cent) of organisations are expecting business litigation to either remain the same or increase in volume this year. Over half of businesses (56 per cent) have already faced accusations or claims of unlawful behaviour.

The research further suggested that the risk of litigation will rise alongside the length of time employees have spent on furlough.

According to the CIPD’s redundancy guide, employers should ensure that the redundancy consultation process, whether individually or collectively, goes ahead and that staff are allowed to comment on these before they are finalised.  As part of this, the consultation should always include assessing whether there are any other alternatives to redundancy.

Furthermore, the body advises that every employer approaches a redundancy process with compassion and treats everyone with dignity, respect and kindness. Within this, the CIPD express the importance of regular, honest and two-way communication throughout the entire process.

For furloughed staff, employers must be careful to ensure that selection pools and criteria for redundancy are fair, objective and reasonable; are not directly or indirectly discriminatory; and that staff are consulted about them before they are finalised.

Chris Parker, MD at Renovo, explained:

Many employees who will be impacted by redundancies will have been on furlough for a long period of time and may already feel disconnected from the business.

More than ever, employers need to be very mindful of how they manage the messaging and process of redundancy consultation. It will also be very important to look at how they provide support to employees to move on positively post redundancy, and quickly.

As such, Parker continued, advising:

Clarity is key. Be direct and honest, be as clear as possible regarding the situation, the possible outcomes and likely next steps. There is a huge amount to consider, so it’s vital that employers allow time to plan the process.