Employers are now having to contemplate their post-COVID-19 future.  As such, redundancies appears to be a likely outcome, especially during the phased withdrawal of the Coronavirus Job Retention Scheme (CJRS aka furlough payments).

An employer in financial difficulty often needs to reduce the number of its employees by making roles redundant.  A redundancy is a potentially fair reason for dismissal, in selecting those to be made redundant, the employer must act reasonably. 

It is vital that employers follow the correct procedures, including the correct redundancy consultation process.  Failure to follow the process, even with a genuine redundancy scenario can result in findings of unfair dismissal at the Employment Tribunal.  To ensure that you follow the right procedures it is recommended to take legal advice to reduce your potential legal liabilities. 

Whilst the right to claim unfair dismissal only arises after two years of service, selection for a discriminatory reason can result in an Employment Tribunal claim.  We advise a best practice approach for all employees. 

Redundancy should be the last resort.  Employers should explore other options such as restricting overtime or a recruitment freeze.  We can advise whether the situation that your business is faced with is a genuine redundancy scenario.

If redundancy is necessary we can assist in devising a process by which to follow dependent on the number of redundancies envisaged.  We can assist in advising how to establish a selection pool and considering the criteria to apply in the circumstances to ensure that the selections are non-discriminatory.  We can assist in ensuring the appropriate amount of redundancy is paid. 

Employees who have been employed for two years or more are entitled by state to a redundancy payment on a sliding scale, calculated in accordance with age and length of service.  Some employers provide their employees with a contractual right to an enhanced redundancy analyse your employees contractual position. 

Most tribunal cases concerning redundancy revolve around the following criteria:

• Whether the people selected for redundancy are actually redundant;
• Whether they have been selected for some unfair reason;
• Whether proper individual consultation and/or collective consultation has been implemented;
• What is the correct amount of compensation to which any redundant person is entitled. 

During a redundancy process, employers will often seek voluntary redundancies from their employees.  This can lessen their potential legal liability to an unfair selection process.  We can advise you on this process, draft the agreements and advise on how to achieve the best settlement. 

In return for signing away their rights to claim, the employee will usually receive a compensation payment.  The first £30,000 of this compensation is usually tax free. 

When signing a settlement agreement, the legal advice for the employee is usually funded by the employer though the advice is independent.  It is a requirement that the employee takes advice and it is signed off by both the employee and his legal advisor. 

We understand that this can be a very difficult time for your business.  We can offer clear advice to protect your business and achieve the best result for you in your situation.