During the coronavirus pandemic you still have to follow the correct redundancy procedures as employees have the same redundancy rights, including redundancy pay.
We advise our clients to start with a plan that will help them to manage the process. The plan should include avoiding redundancies, consulting staff, selecting for redundancy, giving staff notice of pending redundancies, working out redundancy pay and how to support staff and plan for the future.
Avoid job losses: You can avoid job losses by offering voluntary redundancy or retrain employees to do other jobs in your business. You could also ask employees to agree to work less hours (‘short time working’) or temporarily stop working (‘temporary lay off’) if it is included in their contract of employment. If not, you can ask to update their contract. They do not have to agree.
Consult: During the coronavirus you must still consult your employees but you can do so remotely. There is no legal requirement for it to be face to face. However, you are required to sit down individually with each employee who may be affected by the redundancy and explain your planned changes, obtaining their feedback and input.
You must consult any employees who are on maternity leave.
During the consultation period you must let employees know in writing why you need to make redundancies, the number of employees and which jobs are at risk, how you will select employees for redundancy, how you plan to carry out the redundancies, including timeframes, how you will calculate redundancy pay, if you’re using agency workers, how many, where they’re working and the type of work they’re doing.
You must discuss with employees ways to avoid or reduce the redundancies. You must consider and respond to any suggestions made by employees. You can reject any ideas you do not think are reasonable but you should explain why. It’s important to document all discussions and the reasons for your decisions.
There are no rules for how long the consultation should last. You do not need to reach agreement for the consultation to come to an end. You simply need to show that the consultation was genuine and that you aimed to reach agreement. You must be able to show that you’ve listened to your employees and that you responded to questions and suggestions.
Selection – You must select employees for redundancy in a fair way and not discriminate against any individuals or groups. You should base the selection criteria on:
- standard of work
- skills, qualifications or experience
- attendance record which must be accurate and not include absences relating to disability, pregnancy or maternity
- disciplinary record
During the coronavirus pandemic you must not select employees for redundancy just because they’re shielding. This could be viewed as disability discrimination.
You should set up an appeals process for employees who feel they have been unfairly selected. This can reduce the chances of someone making a claim against you to an employment tribunal.
Notice: You can only give an employee notice of redundancy once you’ve finished consulting. You should also let them know in writing. You should include in the letter:
- their notice period
- leaving date
- how much redundancy pay they’re due
- how you calculated the redundancy pay
- any other pay you owe them (for example holiday pay)
- when and how you’ll pay them
- how they can appeal
You must give employees at least the statutory notice period. This is based on how long they’ve worked for you. You should also check your employment contracts.
Redundancy pay: How much redundancy pay each employee receives depends on their age and how long they’ve worked for you. It’s capped at 20 years – working backwards from the date you made them redundant. You must pay:
- 1.5 weeks pay for each year of work after their 41st birthday
- 1 week pay for each year of work after their 22nd birthday
- half a week for each year of work before their 22nd birthday
The limit for weekly pay is £538. The maximum total amount of statutory redundancy pay is £16,140.
You should check your employment contracts as you might need to pay more than the statutory amount. You should pay redundancy no later than an employee’s final pay day.
NOTICE: The above guide is when you are planning to make less than 20 employees at the same workplace redundant. If you’re planning to make 20 or more employees at the same workplace redundant within 90 days (large-scale or ‘collective’ redundancies), there are set rules for collective redundancies which you must follow.
Find out more about employment law and contact our qualified team of solicitors with any legal questions you might have.
Source referenced www.acas.org.uk/redundancy: