By Kathryn Barnes, European Employment Counsel, Globalization Partners
Pandemic-induced lockdowns have had a devastating impact on the global economy, threatening a national unemployment crisis.
And whilst employers have been using a variety of methods to limit the impact of the pandemic, including temporary layoffs/furloughing staff (41%), redeployment (37%), and recruitment freezes (32%), redundancies persist. Indeed, more than a third of employers are likely to shred jobs by the end of the year, according to Acas.
However, in addition to this alarming figure, a quarter (24%) of companies admitted that they were not aware of their legal responsibilities around consulting staff before making redundancies. During this upsetting and uncertain time, it is imperative that employers do not underestimate their legal responsibilities, as falling foul could result in further emotional distress or an unfair dismissal claim.
In today’s uncertain climate, everybody benefits from the redundancy process being as smooth as possible. Here are some key considerations for conducting redundancies fairly and legally.
The value of compassion
The second an employee has an at-risk letter confirming they are potentially going to be made redundant, a whole world of emotions erupt in that individual: ranging from upset, to anger, and disappointment. If a manager or C-Suite leader is not considered to be dealing with the employee compassionately, this could result in the employee fighting the dismissal. The more understanding an employer is, the less challenging the route will be through the process.
Being compassionate and honest is a fundamental mindset to have when going through the redundancy process at any time – and certainly during this current period of economic uncertainty. Everybody sees the news, understands the economic situation, and on high alert concerned for their job stability. During this difficult period, showing compassion and understanding is key.
Be transparent
Employers should ensure they are open and honest about the position of the business throughout the entire redundancy process. Open communication breaks down any difficult barriers and makes employees feel as if they are valued and heard. This is particularly important when talking to employees who are aware of their rights, have a legal connection, or wish to make things difficult.
Consider remote formats
Conducting redundancies in a virtual world takes careful consideration. Recent research found that of those planning to make redundancies, more than a quarter (27%) said they would be telling staff via video calls or over the phone. Only a third (33%) intended to tell people in person.
In today’s digital age, it’s easy to assume that everyone has the power to log on from any location, however, this isn’t always the case. Employers should ensure that employees have both access and the ability to navigate the virtual tools used to conduct remote meetings, such as Zoom or Microsoft Teams, or even send an email.
Factor in extra time
In normal circumstances, the employee has the ability to raise grievances during the consultation period, which can extend the process, and the redundancy timeline. Companies should build in more time when these conversations are carried out remotely. Anything from two to four weeks is usually a guide timeline to try and close it out, and that includes factoring in any investigation to grievance or concerns raised.
Utilise the consultation period
The consultation period is an extremely important part of the redundancy process. During the consultation, employers should ask employees if they have any thoughts on how to avoid making the redundancy. Their suggestion, which could be an offer to work reduced hours or reskill in another area of the business, could be the difference between staying or leaving the company.
This conversation may also prompt a fresh perspective on how the company is working, offering insight on how the business could be diversified, reorganised, or alternated to work more effectively. Ultimately, this talk has the potential to inspire business to turn around.
If suggestions are brought up in the consultation process that cannot be carried forward, employers should return these suggestions in writing with reasons why it is not feasible. By backing up this information in written form, employers can ensure the consultation phase is closed off properly. The last thing anybody wants is for an employee to be blind-sided with confirmation of their redundancy, thinking that their options weren’t considered during the consultation phase. Ardent closure is of the utmost importance.
Know your legal responsibilities
When conducting redundancies, understanding the correct legal procedures is paramount, if employers are to avoid an unfair dismissal claim. In the UK, unfair dismissal is when an employee of over two years acquiring employment rights has the ability to raise a claim against an employer in an employment tribunal, to have them determine that their dismissal is unfair. The tribunal then decides whether there has been an unfair dismissal, and damages are awarded in line with that.
In order to effectively guide employers to make decisions about what is fair or unfair procedurally, they should follow ACAS code of conduct. Before any claim can be made, employees would need to follow a process of early consideration to Acas. This gives employers time to negotiate and come to an agreement before an employment tribunal claim is lodged. A lot of the time, parties can come together in agreement about what the issues are, and how it can be solved.
Be properly informed
Before making a decision, employers should consider getting legal advice to ensure their process is correct. No termination should be made before there is a substantial body of evidence formulated around the individual and the process followed. If even one individual is found to have been unfairly dismissed, it is extremely costly from both a commercial and financial view. Additionally, other members of the workforce may also have cause to look into how they have been treated or how the process was conducted, which in turn will add to the commercial cost to the business.
The ACAS code of conduct is really informative and should be the first port of call for any employer that finds themselves in the position of considering a termination. There are different levels of criteria depending on the reason: for example gross misconduct, misconduct, and redundancy, each carrying a different set of rules.
The redundancy process is a difficult time: for the employee-facing redundancy, and for the employer having to carry out the process. Ultimately, being properly informed about your legal responsibilities, and communicating honestly and compassionately, will ensure the redundancy process is carried out in the best way possible, without any repercussions.
About the author
Kathryn has worked in the legal field for over 18 years. Since being called to the Bar of England and Wales in 2010 after successful completion of her legal studies, Kathryn started to practice in Employment Law. During practice, Kathryn has represented Employers and Employees in Employment Law matters in many different settings and understands the challenge supporting a workforce can bring for any business. Kathryn has worked within International Employment Law and HR for over 10 years, finding the excitement and diversity of International Employment Law not only a thrill but a welcome challenge.
Based in the UK, Kathryn is the European Counsel for Globalization Partners. Kathryn deals with all legal matters pertaining to European Employment Law in the support she provides to the company’s ever – expanding HR Specialists and Operations teams. Kathryn’s diverse and substantial background in European Employment Law and business, allows her to close out complex issues in a short space of time.
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