Redundancy Planning- your questions answered
Earlier this year, Avensure ran a client training webinar about redundancy planning and managing shortages of work.
Given that the government furlough scheme is due to close at the end of September 2021, and the continuing impact the pandemic is having on the economy, we revisit the subject of redundancy planning and look at the key questions posed by some of our clients who attended that webinar.
- How should you proceed with redundancies if the business has people employed on a time limited project?
If you have persons employed on a specific project, usually they will be on a fixed term contract.
If the project for which they are employed is set to continue and is not affected by the downturn in work, there may not be a requirement to place their roles at risk of redundancy. You will still need to make us aware of any such positions when you seek our advice.
However, if any of the employees at risk of redundancy can carry out the work performed by any of the employees on the fixed term contracts, we will need to consider if any of the staff on the fixed term contracts may need to be placed at risk of redundancy or be made redundant to make way for longer serving employees.
- Can a company make a full-time staff member redundant if there are contractors in the team doing a different role? The full-time person could argue that the contractors should go first.
You’re correct. In a redundancy situation your employees will take priority over any self-employed contractors.
So, if any work carried out by contractors can be done by employees at risk of redundancy, the self-employed contractors should be released from their contracts first.
- How should you proceed with redundancies if you have a time limited apprenticeship in a project and that person has completed the apprenticeship?
Generally, apprentices should be excluded from being placed at risk of redundancy.
If they have completed their apprenticeship and have moved on to a standard employment contract, then they will be treated in the same way as any other employee at risk of redundancy.
If they have simply finished their apprenticeship and there is no contractual obligation to provide further employment, the contract will be ended because their apprenticeship has ended. This will not be a redundancy, but a fair procedure will need to be followed to avoid the risk of an unfair dismissal claim.
- Could a long-serving staff member who is at risk of redundancy argue that they could learn the role of someone who has just started with the company?
If you are considering making redundancies and the employee/s affected have over two years’ service with the company, you need to ensure that all possible alternatives to protect their employment are considered.
This includes looking at whether there are other roles in the company, currently occupied by employees who have recently joined the company, that a long serving employee at risk of redundancy could be reasonably trained to carry out.
If so, you should consider making the person with the shorter amount of service redundant and moving the longer serving employee into their role. This is also known as ‘bumping’ or a transferred redundancy.
- Do consultation meetings have to be face to face? Whilst this is preferable many people are working from home, furloughed, vulnerable etc., and it may not be practical.
Consultation meetings are a legal requirement ahead of making redundancies, but you can use conferencing apps, video calling facilities etc., during the pandemic or where the employee is based some distance away and travel would be difficult or costly.
- How does a temporary shortage of work affect someone on a zero hours contract?
A true zero-hour contract has no guaranteed hours or pay obligations, so in a shortage of work situation you would simply not offer work.
However, if the person on a zero-hour contract has built up a steady number of hours, or a regular working pattern via custom and practice over time, then there may be an implied contractual commitment to offer work. In this case you may be advised to treat them in the same way you would an employee on a permanent contract.
- Can you please advise on what is considered suitable alternative employment?
Suitable alternative employment is something that should be considered before making someone redundant.
It is a role that the employee at risk of redundancy has the capabilities to do (or with minimum training) and is a role that has terms and conditions comparable to their redundant position. If someone were to unreasonably turn down an offer of suitable alternative employment their original role will still be redundant, but they may not be entitled to redundancy pay.
This isn’t to be confused with alternative employment which is simply an alternative role the employee has agreed to undertake as an alternative to being dismissed. This role may be on fewer hours, a lower rate of pay or lower status. There will be an entitlement to a 4-week trial, if the employee deems the role unsuitable in that period, they will retain their right to redundancy pay.
Please see some of our previous articles on redundancy for more information:
- Is ‘last in first out’ illegal?
- Employer’s Guide to Redundancy Selection Criteria
- Redundancy – An Essential Guide for Employers
Please note- the statutory redundancy payment cap figure in this article has now changed to £544 per week as of April 2021.
And finally…. for details of our upcoming webinars and live training events, please contact us at email@example.com
Next week- What is constructive dismissal?