Are you using the Furlough Retention Scheme as a stop-gap to prevent or delay redundancies?
Can you afford to pay the 10% top-up salary for those on Furlough from July onwards and 20% in August and September?
Is a Restructure and/or Redundancies inevitable in 2021?
With the Coronavirus Job Retention Scheme (CJRS) coming to an end in September and with employer’s salary contributions kicking in from July, now is the time for business leaders to take stock and make decisions to protect the long-term success of the business. Not only to preserve cashflow but to ensure the right resourcing levels and capabilities are in place to support the business moving forward.
The First BluSkyHR Redundancy Blug, namely, ‘Alternatives to Redundancies’, highlighted options to avoid or delay redundancies. However, if you find yourself with no choice but to reduce your headcount in the coming months and you want to avoid an ET1 claim landing on your desk then check out my…
Top 5 Tips to Avoid Costly Mistakes!
1. Failure to build adequate time into the planning stages
The number 1 biggest mistake employers make is to rush into a redundancy consultation process before properly scoping out the project and planning the What, Where, How, When, Who?
In my experience, 9 times out of 10, a problem will throw a spanner in the works. Therefore, if you have a specific date by when redundancy notice will take effect then building in contingency time will avoid unnecessary salary costs.
Employers are legally required to collectively consult with Employee Reps or Trade Unions for a minimum of 30 days if making 20 or more redundancies or 45 days if making 100 or more redundancies, in a rolling 90 day period.
Given the additional burden that comes with collective consultation, it is imperative to get your ducks in a row from the outset. Get your timeline drawn out, your documentation such as ‘at risk’ letters and scripts prepared and ensure whoever is involved in the process is fully briefed and understands their role and responsibilities.
NOTE: By giving yourself time to adequately prepare, things are less likely to go wrong! That’s not to say they won’t go wrong but at least you have done everything you can to minimise costly risks to your business.
2. ‘Dressing up’ a dismissal as Redundancy
Are you 100% confident that what you are embarking upon is a GENUINE redundancy situation? Strange question, I know! But what if it isn’t redundancy?
What if for example, you are changing a few duties to individuals’ roles and making them redundant as a result of that but in actual fact the roles are not dissimilar? Or you are looking to outsource some of your functions and as a consequence make staff redundant when in fact the Transfer of Undertakings (Protection of Employment) i.e. TUPE applies? Or what if you have an underperforming employee, who you haven’t properly managed, and the easiest option is to make their role redundant?
When you dismiss an employee fairly (and redundancy is one of the 5 fair reasons for dismissal) the reason for dismissal needs to be accurate. Providing another reason for dismissal can get you into hot water as is exactly what happened in the case of Rawlinson v Brightside Group.
If it comes to the employee’s attention, through a Data Subject Access Request (DSAR) or the Grapevine, that you have made redundancies that are not GENUINE, there are costly consequences such as unfair dismissal claims and/or claims for failure to consult under TUPE Regulations.
NOTE: Ensure you are really clear about what your end goal is and seek advice from an HR Professional to ensure you are on the right track. After all, you can still achieve your desired outcome, it may just be a different process you need to follow to ensure you are acting within the law.
3. Check whether you have a Redundancy Policy
Most businesses follow the Statutory Redundancy Process and don’t have a specific Redundancy Policy they are bound by. If you do find a Redundancy Policy hiding in your Employee Handbook or the depths of your Intranet, just check that the Policy isn’t contractual.
Does the Redundancy Policy have any particular binding clauses that you need to be aware of i.e. Enhanced Redundancy Package, the requirement to take Garden Leave or PILON during Notice Period, or specific Selection Criteria that must be used?
If it is contractual, it doesn’t mean you can’t vary the clauses but it is going to be trickier, time-consuming, and more difficult to impose changes, particularly if it is there in black and white!
NOTE: Double-check if there is any existing Redundancy Policy in place before embarking on a Redundancy Process as that will determine the decisions you make.
4. Failing to Properly Consult with Elected Representatives
Something as simple as not providing adequate and meaningful consultation can easily get you into a sticky situation.
Whilst Consultation, whether Individual or Collective, can be time-consuming and a bit of a drag, failure to do so can add up to some hefty fines. Thus, making you liable to fork out 13 weeks’ pay per affected employee plus legal fees.
NOTE: Make sure you are clear on your legal obligations and timeframes required for Collective Consultation. Be open to suggestions and ideas employees have as you never know they might come up with a ‘Win Win’ solution you hadn’t previously considered.
5. Failing to provide Employee Reps with the knowledge and skills they need
Quite often, elected Employee Representatives come together with no prior experience or skills in how to be effective in this extra-curricular duty. They are usually elected/nominated as a result of the legal requirement placed on the business to Collectively Consult with staff as part of a Redundancy or TUPE exercise. They may not be familiar with meeting etiquette or the importance of maintaining confidentiality and they may not feel confident or skilled enough to undertake the role.
If you don’t equip your Employee Reps with the adequate training they need you could find individuals may not add any value to the process, they may avoid speaking up or participating at meetings out of lack of confidence. Thus, you won’t get the true reflection of the overall views and opinions of the workforce and it negates the purpose of meaningful consultation.
So ensure your Employee Representatives have a clear understanding of their role and gain the skills and capability to engage productively at the formal consultation meetings. Ensure they have the skills to seek feedback from their constituencies and the ability to present the feedback in a well-articulated and balanced way to management.
NOTE: Invest in training your newly elected Employee Representatives so they acquire the key skills to be effective in their role as a Rep; enabling them to make a valuable contribution to the process.
How can we help you avoid these costly mistakes?
BluSkyHR has a cost-effective Redundancy Support Package providing you with all the support and resources you need to feel equipped to manage change in your business. The package is perfect for employers and business owners making less than 20 redundancies in a rolling 90 day period.
Of course, if you are making 20 or more redundancies, we can absolutely support you, whether that be a ‘light touch’ approach or complete hand-holding through the process! Whatever, you need, the right level of support is available just get in contact for a no-obligation chat to explore your requirements via Book a Meeting or email [email protected]
For further details on the Coronavirus Furlough Guide, Check out this CIPD Link for useful info.