Since it was launched in March 2020, the Coronavirus Job Retention Scheme has protected millions of jobs. However, for many employees this protection is likely to be short term. With employers expected to bear some of the cost of their furloughed employees from August, and the scheme due to be wound up at the end of October, large numbers of redundancies over the coming months are likely.
To assist employers, XpertHR has published guidance on How to carry out redundancies when employees have been furloughed. As the guide explains, the Coronavirus Job Retention Scheme does not directly affect the normal operation of employment law when it comes redundancies – meaning the obligation to behave reasonably in making an individual redundant and the requirement to consult collectively remain key, despite the extraordinary circumstances in which many employers find themselves.
In addition, employers will have to grapple with new challenges, including avoiding penalising furloughed employees when selecting for redundancy. They need to exercise particular care in relation to those whose return from furlough is impacted by underlying health concerns or ongoing childcare obligations. The issues of notice pay for redundant employees and calculating statutory redundancy pay are also potentially affected by employees being on furlough.
Jo Stubbs, XpertHR’s global head of product content strategy, says, “Over the coming months employers may have to make the tough decision to make staff redundant in order to survive. But, despite the extraordinary circumstances many are facing, they cannot ignore their normal obligations to act fairly and follow the necessary processes. In addition, the coronavirus pandemic and the furlough scheme have thrown up a number of complications they are unlikely to have had to consider during previous redundancy exercises. Our guide explains the issues facing employers when considering furloughed employees for redundancy and the steps they can take to protect themselves from possible tribunal claims.”
XpertHR’s guidance includes:
- Ensure that furloughed staff are consulted as part of any redundancy exercise, using online platforms or other forms of electronic communication when appropriate.
- Construct a pool for selection based on the future needs of the business and avoid penalising employees who have been furloughed.
- Avoid using the fact that an employee has been furloughed as a reason for selecting them for redundancy.
- Be aware of the potential for discrimination in selecting employees whose vulnerability to coronavirus makes it harder for them to return to work.
- Avoid penalising employees whose difficulties with childcare affect their attendance at work.
- Bearing in mind the potential complexity of this issue, consider if furloughed employees given notice of redundancy should have their pay topped up to normal pay for the duration of the statutory notice period.
- Avoid dismissing furloughed employees without notice as the Coronavirus Job Retention Scheme will not cover a payment in lieu of notice.
- Before asking employees to return to work during the notice period, consider if the terms of their furlough indicated that they would be away from work for a set period.
- Calculate redundancy payments on the basis of a normal week’s pay rather than employees’ pay while on furlough (unless they have no normal working hours).
To view the guidance on carrying out redundancies where employees have been furloughed click here.
XpertHR also offers guidance on running a collective redundancy consultation process with a remote workforce during the coronavirus pandemic.
XpertHR provides comprehensive information and guidance for employers on coronavirus – including model letters and the answers to frequently asked questions.
For more information on XpertHR visit: www.xperthr.co.uk