We are constantly bombarded with news about how the coronavirus is affecting the UK economy and we hear statements such as the recovery will be a V or a U but regardless of whether it ends up being a W, the end result is the same, job losses.
Regularly we are hearing of employers of all sizes, including big name brands such as British Airways, EasyJet, Deutsche Bank, announcing that they will be letting, cumulatively, thousands of workers go. Indeed, the Office of National Statistics (ONS) confirmed that there were 73,000 job losses between March and July 2020, the largest fall in a decade. It is also believed, through ONS data, that those between 18 to 24 and those over 65 are bearing the brunt of redundancies.
In light of this, ACAS reported a160% increase in enquiries in the last two months compared to same time last year. Similarly, the Citizen Advice Bureau reported sevenfold increase in queries regarding redundancy since February 2020.
Whilst the Coronavirus Job Retention Scheme (CJRS) has saved countless jobs by offering millions of pounds to organisations to furlough staff, it is currently in the process of tapering off before ending in October 2020.
Commentators have stated that the end of the CJRS will lead to a cliff-edge and that the figures we have seen so far will be a minor amount in comparison to what is to come as the financial difficulties of maintaining employees with reduced turnover sets in.
Whilst this is troubling, we have seen the UK pull together in wonderful and unexpected ways such as increasing the number of flexible (or casual) contracts, increasing demand for small businesses and/or the development of new technology to promote more home working. Alternatives to redundancy have seen organisations offer private furlough schemes, unpaid sabbaticals to keep employees on the books etc. and offering outplacements to those individuals who may have lost their role.
We do have to be mindful and many commentators have pointed out that there is a human aspect to redundancy and the effects can be devastating. It is therefore important to remember to communicate openly and honestly with our workforce. It is also a good idea to promote wellness and positive mental health in these difficult times as stress about losing a job can exacerbate other existing mental conditions.
Our primary thought may go to those individuals who are in the redundancy process and/or have already been made redundant. These individuals are likely finding the situation very stressful with concerns such as whether they will be able to obtain alternative work elsewhere.
However, we should also not forget those who are either unaffected or will remain employed as any redundancy process is likely to affect morale within your organisation. In a recent study by Perkbox, it found that:-
- half of employees were negatively affected over the past few months as a result of employers reducing staff numbers and expecting that the remaining workforce would pick up the slack;
- 19% of those not furloughed but who had colleagues that had been furloughed said they had to work harder which left 11% of employees feeling resentful of this; and
- 58% of employees found the changes to the CJRS Scheme brought uncertainty and negatively impacted their mental health leaving them with levels of stress and anxiety.
This concoction of uncertainty and potential job losses has left many employers noticing increased levels of presenteeism which, according to Canada Life’s research with Opinium, has worsened our ‘always on’ culture. Ultimately, it is considered that employees who do remain may suffer from productivity issues and/or burnout so whilst your organisation may have weathered the storm, the workforce may be spent and take time to get back up to previous levels of productivity.
Ultimately, the current situation is difficult on both employers and employees. Redundancies are currently affecting a great number of people and we should try to remember that whilst redundancy tends to be a more ‘business’ and therefore emotionless rationale for dismissal, it still affects people. Consequently, we should bare this in mind when going through such a process and continue to encourage and support people to look after their physical and mental health.
Where difficult decisions need to be made, such as redundancies, a fair process must still be followed to avoid employment tribunal claims. This involves:-
- making a plan for your specific redundancy situation. Including how and when you will inform, consult your employees and, ultimately, how you will decide on who to select for redundancy. It should be borne in mind that whilst making less than 20 employees redundant does not have strict timescales, the shorter the consultation, the less likely it will be considered ‘meaningful’;
- trying to avoid compulsory redundancies wherever possible. This may include but not limited to:-
- offering of voluntary redundancy or early retirement;
- offering flexible working such as job shares;
- considering suitable alternative roles;
- reducing hours for employees and/or limiting any overtime and applicable payments; and/or
- reducing your agency/self-employed headcount.
- ensuring you go through a fair consultation process. This means having a meaningful consultation process with your employees and not approaching the matter as a fait accompli, or in other words, the matter is already decided;
- being transparent in your decision making. In order to select individuals for redundancy, you will need to demonstrate that there is diminished requirement of work that the individual or group does or place of work has been closed or that the company as a whole will cease to trade. Where you intend to use a scoring matrix, make sure that this uses objective scoring and preferably marked by two managers; and
- offer an appeal from the decision, as you would a disciplinary or grievance.
Remember that for workers on furlough, they are entitled to redundancy payments based on their ‘normal’ 100% salary.
Finally, if you are looking for more information on the topic of redundancy, there is some free information on the government website and ACAS have recently updated their guidance which goes into additional detail regarding the redundancy process, please see the links below.
If this article was of interest to you then please do not hesitate to check out our website. We have a dedicated page to redundancy which you may find of interest by clicking the link here. There is also a handy redundancy calculator which you can download from the website. Alternative get in touch with any of the employment team.
If you have any questions arising from the topics discussed above then please do contact any member of the team, we are able to provide:-
- a virtual or physical presentation on redundancy;
- advice on redundancy either on an ad-hoc basis or through our advice lines. For more information on our fixed price advise services, please click here;
- bespoke training packages on redundancy; and/or
- template/bespoke documents.
The story and our review - https://www.ts-p.co.uk/news/the-story