The Covid-19 pandemic is having an ongoing impact on businesses and employees – and with the furlough scheme due to end in April 2021, many are facing the prospect of redundancies.
SoGlos spoke to the employment law experts at Gloucester-based Davies and Partners solicitors, to find out how Gloucestershire businesses can deal with redundancies the right way.
About the expert – Nigel Tillott, director at Davies and Partners
Nigel Tillott is head of Davies and Partners’ employment and regulatory departments, advising businesses on all aspects of employment law. Nigel has extensive experience in helping businesses avoid employment difficulties, as well as advising on workplace issues and representing businesses at employment tribunals.
Davies and Partners has been providing specialist employment law services, from redundancies to contracts and policies, for over 30 years – with a strong reputation in Gloucestershire, Bristol and across the UK.
Has the government furlough scheme gone far enough to help businesses protect jobs during the pandemic?
The furlough scheme has had a massive effect in keeping people in work when they would otherwise have been made redundant. At some point though, whether it is at the end of April or later, it will come to an end. At that time it is inevitable that there will be less jobs available and there will be an increase in redundancies.
In the early days of the furlough scheme an employer could give notice to an employee and still claim furlough payments during the notice period. Therefore, employers were tending to move on with redundancy situations on the basis that they could at least get most of the notice pay repaid by the government.
Understandably, the government has stopped this from happening which seems to have gone some way to protect jobs, at least for the time being.
Are redundancies more likely to be made when the furlough scheme ends?
Keeping employees on furlough is generally not costing employers significant sums, so decisions can be delayed in the hope that there will be an upturn and employers will have experienced employees on their books who they can bring back.
When the furlough scheme does come to an end, decisions will need to be made about redundancies. Clearly this is bad news for anyone whose job is at risk, but it is not great for employers either. In this climate, employers may not have the money to make enhanced redundancy payments in return for employees signing settlement agreements – putting them at higher risk of legal action.
Surely if there is no longer a job that is the end of the story?
With employees finding it more difficult to secure alternative employment, coupled with the fact that there are no fees to pay to put a claim through an employment tribunal, there isn’t a great downside to pursuing a claim – especially without the prospect of a new role to get into. Also, the employee’s success in obtaining alternative employment is a major factor in measuring compensation with successful claims, so the stakes are inevitably higher at the moment. My experience is that employees are often adding an allegation of discrimination to the claim – for example, “I was only selected because of my age, disability or race”.
Due to the impact of Covid-19, the tribunal system is currently dealing with considerable backlogs, meaning claims can often drag on for well over a year. If an employee is making a claim for discrimination, this can complicate matters further too.
What steps can business owners take to prevent making redundancies?
Clearly they can’t keep things as they are. Sometimes it might be possible to implement other changes, for example pay cuts or reduce working hours, to avoid redundancy. However, such changes often don’t represent long term solutions and redundancies are inevitable. The key for employers is to get the redundancy process right.
What advice can you give business owners who are facing the prospect of making redundancies?
It is important for employers to make a clear plan focussing upon roles that are no longer required, rather than individuals. There is a need to carefully consult, sometimes with representatives, but always with individuals at risk. A regular accusation in tribunals is that consultation was simply a tick box exercise.
When it is clear that the role that is no longer required is a one-off, the process may be more straightforward. However, employers will always have to think carefully about whether there is a pool of employees doing similar or interchangeable roles, from which a selection needs to be made.
Where there is, particular care is required to ensure that objective selection criteria are used and fairly applied. No employee likes being told that he or she is not as good as someone else and the scoring is likely to be challenged.
If businesses do need to make redundancies, do they need to seek legal advice before doing so?
For employers it is tempting to simply get on with it, but in these circumstances, it is often sensible to obtain legal advice. The cost is likely to prove very low when compared to the risk of getting it wrong.
How can Davies and Partners help businesses through the redundancy process?
At Davies and Partners, our team is one of the most experienced in providing redundancy advice within the south west region and we are always happy to assist in providing a clear and practical strategy.
