It was created to try and save jobs, but now the Coronavirus Job Retention Scheme (CJRS) has changed, redundancies across the country are inevitable, and businesses need to be prepared.
The coronavirus pandemic has had an extraordinary impact on businesses across the UK. When lockdown measures were introduced by Prime Minister Boris Johnson in March, the entire country was forced the make immediate changes to their ways of working and many businesses had to make the difficult, but necessary decision, to furlough members of staff under the CJRS.
However, now employers will be required to start contributing under the scheme from 1 August, waves of redundancies are expected to take place over the coming months and have already been making headlines on a daily basis. Therefore, it’s never been more important for businesses to start planning ahead and think carefully about their future longevity.
A time of uncertainty
While the furlough scheme was introduced as part of a package of measures to alleviate the impact of Covid-19 on both employers and employees, the time has come for business owners to take partial financial responsibility back for their staff. This means many will need to review their workforce and consider whether current levels of staffing are sustainable or whether some tough decisions will need to be made.
Know the ins and outs
There are a whole host of criteria and requirements employers need to consider when planning redundancies to ensure they’re acting fairly and justly. For example, if more than 20 people are going to be made redundant, this triggers collective consultation requirements, including minimum consultation periods, during which redundancy dismissals can’t take effect. The length of this period varies depending on the number of people up for redundancy; for 100 people or more it’s 45 days, whereas for 20 to 99, it is 30.
As well as collective consultations, employers are required to consult with employees individually and follow a fair process. This will be particularly relevant where employees have more than two years’ continuous service because they will be able to bring unfair dismissal claims if the requirements are not met. Individual consultation could be challenging during the coronavirus lockdown. If headcount is being reduced, business owners must be completely transparent on how employees have been pooled and scored and what criteria is being used to decide the outcome.
Regardless of the number of people at risk of redundancy, it’s vital employers follow a fair process, and meet with any employees who may be at risk and listen to their suggestions as they could have ideas for avoiding redundancies. Remember that those made redundant are entitled to be given their contractual notice or payment in lieu. With all this in mind, I can’t emphasise enough how important it is to plan ahead wherever possible, particularly now the rules of the CJRS have been made clearer going forward.
Compulsory vs voluntary redundancy
Employers can (but are not obliged to) seek volunteers for redundancy.
This is a good option for some businesses as it offers employers the chance to help protect staff who are more dependent on their job. It also shows that the employer has considered alternatives to making compulsory redundancies.
Employers should balance this with the risk that seeking volunteers might risk losing their top performers unless they make it clear that applications for voluntary redundancy will be considered but are not guaranteed.
However, if after this process is completed the business needs to reduce headcount further, they would then move to consider compulsory redundancies.
Communication is key
Throughout the entire process it’s absolutely crucial for business owners to keep in regular contact with all members of staff who are at risk of redundancy before a final decision is reached. This can be as simple as holding regular meetings ‘ virtual is fine during the current climate ‘ or calls with them to discuss the situation in more detail and look into the options on offer. Once the end of the consultation period is reached it’s time to confirm who will be made redundant and whether any alternatives to redundancy for certain roles have been found.
Even once a particular role has been confirmed as redundant, the employer should consider whether there are any other vacant roles within the business which the employee could be considered for. It is important that employers don’t make any assumptions about what roles an employee faced with redundancy might be interested in and they should provide details of all vacancies for the employees to consider.
If an employee is pregnant or on maternity, they have the right to be offered any suitable alternative employment ahead of other team members. Otherwise, if there is more than one potentially redundant candidate up for an alternative role, a traditional, competitive interview process can be undertaken to decide who is the most suitable for it.
It’s inevitable that the next few months will see a surge in businesses being forced to make redundancies, particularly as the CJRS takes more of a back seat. But by preparing early, employers across the country will be able to do the best they can, not just for the longevity of their business but for their employees too.