Redundancy during Furlough
Redundancy during Furlough
Many employers who have placed employees on furlough leave will now be considering whether they can afford to bring those employees back at the end of the furlough scheme. It is difficult to predict how far Covid19 will continue to impact on businesses but many employers are having to make difficult decisions in order to maintain the viability of their businesses.
What should employers be doing now if they think that they will have to make redundancies?
It is important to bear in mind that the Furlough scheme makes no difference to the usual redundancy process and that employers will have to follow a fair procedure. There is no reason why this process cannot be started before the end of the Furlough scheme. So if you think that you are likely to be making redundancies, you should start preparing for this.
Selecting employees for redundancy
First of all, you should start considering your selection process. You cannot just decide to make redundant those employees who have not returned to work.
An employee may have grounds to make a claim in unfair dismissal if the employer has not followed a fair selection process when making redundancies. So if you have a number of employees who do the same or a similar job, you will need to apply fair selection criteria to all of those employees in order to decide who is to be made redundant. Those criteria will need to be applied to employees who are at work as well as those still on furlough leave.
Consultation
An employer needs to follow a proper consultation process with employees who are at risk of redundancy, and the Covid19 situation makes no difference to that. Even though you may not be able to meet with an employee in person, on account of current restrictions, you will still need to set up meetings, which could be conducted by phone or by video link.
What about Notice?
There would seem to be no reason why you could not give notice of redundancy to employees who are on furlough leave and still get assistance from the Furlough scheme for their pay during the notice period. Although the Government guidance does not say anything specific on this, many employers facing tough times are giving notice during furlough, which means that they are benefiting from Government assistance for the duration of the notice period. If you do give notice during furlough, however, you should pay full pay for the notice period, and not just 80% pay. That may not be the case if you provide a notice period in excess of the statutory minimum, but you would need to take advice on this.
If you provide a payment in lieu of notice rather than keeping employees on furlough leave during the notice period, then you would not be able to benefit from the financial support of the Government during the notice period.
Get assistance with the redundancy process
It is important to bear in mind that employment law has not been changed by Covid19 or the Furlough scheme. If you need to make employees redundant, you still have to follow a fair procedure in accordance with the law. If you would like to have guidance through this process, or if you just have a question to ask, then please contact me, Elaine Walker, on Elaine.Walker@mustoeshorter.co.uk, or call me on my direct line, which is 01305 752747.
If you would like to have a face-to-face meeting, this can be arranged by video link, or in person at our offices or yours, with appropriate social distancing.