Redundancy Post-Furlough Leave
The Coronavirus Job Retention Scheme (CJRS) was implemented as an emergency measure with the primary aim of supporting those employees whose roles would otherwise have been the subject of unpaid lay off or redundancy as a direct result of the Covid-19 crisis. Some 6 weeks on and with no end to the lockdown in sight, employers should now be forward planning and giving consideration to their options for managing staffing issues more longer term once the CJRS comes to an end, which is currently set for 30 June 2020.
Whilst a primary purpose of the CJRS was to avoid redundancies, that is not to say that the scheme completely removed the need for them. In some cases, because of the way the pandemic has panned out, it may simply be that the CJRS has simply delayed the inevitable. The good news for employers is that existing employment laws have been unchanged by the introduction of the CJRS and the concept of furlough leave and where there is a genuine downturn in work, an employer can still legitimately make employees redundant.
In theory, an employee can actually be made redundant whilst on furlough leave however there is a question as to whether an employer would be able to justify this approach on the basis that furlough leave has been introduced specifically to avoid redundancies. Although untested in the Employment Tribunal to date, there is a risk that if an employer seeks to make an employee redundant during a period of furlough leave that employee may be able to argue that the dismissal was unfair if the employer cannot show that it was not reasonable for the employee to have remained on furlough leave for the duration of the CJRS. Each case will of course turn on its own facts though and if you do need to look at reducing headcount whilst the CJRS is live and furlough leave is an option, please get in touch for specific advice on process and risk.
Once the CJRS has ended however, this specific risk will disappear and employers will be able to revert back to what they always knew. If, following the demise of the CJRS an employer is still experiencing a reduction in work of a kind undertaken by a certain employee or, group of employees then they can look to reduce headcount on the basis of redundancy. Where an employer needs to consider redundancies, care needs to be taken to ensure that the correct consultation process is followed. When it comes to redundancies, one of the biggest risk areas is the consultation process and employees can raise a number of arguments to support a claim of procedural unfairness, including:
- An unreasonable failure to engage in “meaningful” consultation
- Failure to convene a proper pool for selection
- Unfair and/or discriminatory selection criteria
- Unreasonable failure to undertake a search for alternative employment or, improper consideration of potentially viable alternatives to redundancy
- Breach of internal redundancy policies and procedures
In the current climate, whilst emotions and fears are running high, it will be vitally important for employers to ensure that they are following a legally compliant redundancy consultation process. Individuals will be increasingly nervous about the prospects of being made redundant and employers can expect not only increased resistance to redundancy proposals but also greater scrutiny from employees who are placed at risk of redundancy. Additionally, individuals who are made redundant may feel that they have little to lose in challenging their dismissal in Tribunal and when faced with this worry, an employer needs to ensure that it has all the adequate protections in place to defend its position.
Following termination of employment on grounds of redundancy, employees will be entitled a redundancy payment and a notice payment: both of which being calculable with reference to an employee’s length of service and weekly salary. In some cases, the cost of a redundancy dismissal can be prohibitive to an employer and so having consideration to alternative ways of reducing headcount within your organisation may be necessary post furlough leave.
If you think that you might be in a position where you need to look at redundancies or restructures post-furlough, or if you would like to understand what other options are available to you to help manage your staffing levels, then please contact a member of the Employment Law team on 01274 864999 who will be able to discuss your options further.