Free Consultation

Redundancies and Dismissals

Business leaders are currently putting vital business continuity plans in place, which may include possible redundancies and various forms of restructuring to include varying employee terms and conditions

Our FAQs are for general guidance only, and do not constitute and should not be relied upon, as legal advice. Every business and challenge is different. If you are an employer and your business needs specific support and advice for your unique context please contact us at legal@lexleyton.co.uk

Last update: 12/08/2020 – 16.52

Top 10 alternatives to redundancies

Employers are able to claim back 80% of an employee’s salary (up to a cap of £2,500 per month) where an employee is put on a leave of absence, is a potentially invaluable alternative to redundancy for employers. Importantly, where employees earn significantly over the cap on furlough payments, this may not be an attractive option: employers may feel they need to top up payments significantly when the furloughed employees cannot carry out any work at all under the scheme. From 1st July 2020 the furlough scheme will allow part-time work and furlough to co-exist.

Either in conjunction with a proportionate reduction in hours or otherwise. Employers will ordinarily need to seek writtenagreement to action such a change. If 20 or more employees are affected, collective consultation obligations may also be triggered. Employers should consider the practicalities of having a large number of staff working part-time and ensure that arrangements are managed appropriately.

If they exist, it may be possible to amend employees’ working patterns and reduce salaries without express consent. Likewise, you should also check existing employment contracts for an express right to temporarily lay off staff where there is a downturn in work. This kind of clause is often included in contracts in certain sectors where workflow ebbs and flows and could be really useful for employers at this difficult time. For more guidance on varying employee terms and conditions please visit our page Changing employee Terms and Conditions

As a result of school closures, some employees will have increased childcare responsibilities and may be keen to adopt flexible working patterns. Discuss the possibility of this with relevant employees and consider whether it will aid with cost-cutting. Be cautious, however, about treating those with childcare responsibilities differently to others. Employers should also ensure that they retain the right to terminate the arrangements on reasonable notice so that those workers can recommence their original working pattern when normal business conditions resume.

Withdrawing an offer that has already been accepted without providing notice or making a pay in lieu of notice risks breach of contract claims.

If and when seeking volunteers for early retirement, employers must be careful to ensure that any termination of employment does not amount to a dismissal giving rise to potential age discrimination claims.

If this is permitted under the relevant bonus scheme. It is best practice to discuss this kind of measure with employees, but if bonuses are non-contractual, formal consent should not be required

Although many will be reluctant to take a sabbatical when there is a lack of options to travel widely etc, it may suit those who do have childcare or other responsibilities of care. Ensure any agreed arrangement is properly documented and consider which (if any) terms of employment will continue to apply during the absence.

Consider whether any are non-contractual and can be stopped, whether temporarily or otherwise.

As a general rule, adequate notice will normally be double the period of leave (i.e. a 5 working-day period of leave will require 10 working-days’ notice). This forward planning effectively allows employers to ensure staff availability when normal business conditions recover.

Redundancies and Dismissals

As employees in their probationary period will have under two years they are less of a concern in terms of termination. Employers should be mindful of the usual discrimination, whistleblowing or health and safety risks. However, given the current situation this is a low risk, as such employees are an obvious choice in reducing head count.

Employers should just tell them the truth: that they must terminate their contracts because they have nothing for them to do at this point.

Casual employees have the same rights as other employees and are entitled to notice pay. Dismissing them carries the same risks as dismissing any other employees.

Redundancy consultation should last as long as is necessary to cover the required elements of the consultation process. For proposed redundancies of 20 or more employees at a single establishment, there are particular requirements which must be covered in a consultation. If this is likely to apply to your business, contact your LexLeyton Employment Solicitor as soon as possible.

At the moment there is no clear authority to say definitively that coronavirus could be a ‘special circumstance’ which excuses a lack of consultation in the case of redundancies of 20 or more employees.  Even where it does apply, employers must take all reasonable steps to try to consult collectively before any redundancies take place.  The impact of furlough leave and pay (and other Government support) has potentially reduced the efficacy of a ‘special circumstances’ defence in a lot of cases, although businesses will still have to reach Government funding coming online in late April.

This is a complex issue which is potentially risky.  If you have specific questions in relation to this, please contact your LexLeyton Employment Solicitor for specific advice.

Employers have a large degree of discretion in deciding who should be placed in a selection pool of employees at risk of redundancy.  Put generally, as long as an employer has genuinely put its mind to the question, there is little scope for a decision on the pool to be held by an Employment Tribunal to taint a dismissal and make it unfair.

However, in using their discretion, employers will generally want to consider the following points:

  • According to the employer’s rationale for redundancy, what is the work that will end or diminish? It stands to reason that those who undertake that type of work will likely be placed ‘at risk’ and join the selection pool.
  • Where there are employees who carry out somewhat similar work, is this crossover sufficient to add them to the pool?
  • Is similar work carried out at a different location? If so, should these employees also be added to the pool or are there factors precluding this?

Employers should not overlook the importance of getting the selection pool right.  Rather than simply looking to avoid liability for unfair dismissals, employers should make sure that the selection pool allows them to achieve the workforce they need going forward.

Download the guidance on this topic