Employers need to beware redundancy pitfallsÂ…

Lisa Branker
Lisa Branker

Even with the introduction of the Job Support Scheme after the furlough scheme ends on 31 October, many employers may still be facing further strife, a leading firm of North East solicitors has warned.
With increased restrictions affecting many businesses, companies may be left with little option but to consider redundancies in order to survive.


But according to Lisa Branker, solicitor in the employment team at Sunderland’s Richard Reed Solicitors, it is vital that companies follow the correct procedures, or they could find themselves facing costly court action.


“Getting the redundancy procedure right is crucial, as mistakes can open the door to an employee bringing a claim before an employment tribunal,” she said.


“There has already been an increase in claims, particularly in regard to unfair dismissal relating to redundancy.”


Lisa has come up with several pitfalls that employers need to be aware of, to ensure they are acting correctly.


This includes failing to count voluntary redundancies towards the trigger for collective consultation.


Companies have an obligation to inform and consult with recognised trade unions or employee representatives if 20 more staff are in danger of being made redundant.


“If any employees have volunteered, they must still be counted,” said Lisa.
“If they are omitted from the calculation, the company could face claims of up to 90 days actual pay for each affected employee.”


Companies also need to consult with employees on an individual basis, taking into account anyone who may be absent from the actual workplace for any reason.


At the same time the old approach of “last in, first out” cannot be used as part of the selection procedure “as it now carries the risk of age discrimination,” warns Lisa.


The solicitor also advises against getting people to apply for their own jobs rather than using a proper selection assessment as it could be viewed by an employment tribunal as unfair.


Other possible problems which could arise include concealing an employee’s assessment scores and also not treating anyone on maternity, adoption or shared parental leave equally.


“Once you’ve selected employees for redundancy you should offer them any suitable alternative roles in your business,” said Lisa who adds that any employees at risk of redundancy who are on maternity leave, shared parental leave or adoption leave have special protection, in that “they have an automatic right to be offered any suitable alternative jobs.”


In these cases, if the correct procedures are not followed, then once again the employer could be faced with unfair redundancy dismissal.


While many workers have been benefiting from furlough pay, employers cannot base notice and redundancy payouts on these figures but on the full amount staff would have received if they had not been furloughed.


“The best advice is for employees to speak to a professional to ensure that they follow the correct procedure from the outset,” said Lisa.
“This means they can avoid putting their business in further jeopardy with a potential disruptive and expensive employment tribunal claim.”


For more information contact Lisa at Richard Reed Solicitors on 0191 567 0465

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