Alternatives to Redundancy

According to data submitted to the government, up to 450,000 redundancies will be made over the next few months.

As the Coronavirus Job Retention Scheme (CJRS) continues to wind down, we take a look at alternative options that Employers may be able to consider before beginning the redundancy process.

• Furlough and Flexi Furlough

Employers may choose to re-furlough or introduce ‘flexi furlough’ for any employees that were previously put on the scheme on or before 10 June.  The Governments Coronavirus Job Retention Scheme (CJRS) which deals with Furlough currently runs until 31 October.

• Short-time Working & Lay-Off

If an employee does not meet the criteria for the CJRS, the employer may impose a lay-off or short-time working but only where the contract of employment stipulates their right to do so. The employee may incur a reduction in working hours, or a period of lay-off with a corresponding reduction in pay.

• Reduce Working Time

Employers may seek to permanently reduce an employees working days or working hours, with a corresponding reduction in pay. The employee would need to agree to this change and consultation would be needed.

• Flexible Working

Formal flexible working regulations apply to employees with at least 26 weeks’ continuous service, however Employers may choose to waive these requirements to allow employees to request a permanent change in their contract. Employers must outline any changes to an employees working hours, days or location, how long the arrangements will be implemented for and how the employees pay and benefits will be affected.

• Recruitment or Overtime Freeze

During a recruitment freeze, an employer can temporarily stop all non-essential hiring to reduce costs. Employers may also consider that there is no requirement for overtime for existing employees, as long as there is no contractual entitlement.

• Pay Freeze or Pay Cuts

Employers may decide to freeze pay increases or even reduce an employees pay. A pay reduction must be mutually agreed by Employer and employee in order not to breach the contract of employment.

• Retraining & Redeploying

Employers may need to consider if there are alternative working locations or positions to offer with suitable retraining. If an employer is likely to redeploy a large number of employees, they would have to conduct a collective consultation with all affected employees, in addition to individual negotiations.

• Voluntary Redundancies

Before beginning the process for compulsory redundancies, employers may consider if they can offer voluntary redundancies. An early retirement package could be one element of a voluntary redundancy offer open to all employees. Employers are not obliged to select employees just because they have volunteered for redundancy.

The next few months are likely to be extremely challenging for some Employers and we hope that these pointers help Employers to consider all the options that could be available. 

We believe that there are likely to be many Employers that have not followed the formal contract changes needed under Furlough and Flexi Furlough and if you are one of these we suggest that this is corrected as soon as possible.   It is a requirement under the scheme to ensure that the correct formal process and contract changes have occurred, where this is not the case it could affect the qualification of the claims that have already been made under the scheme. 

All of the areas recommended require amendments to contracts of employment including Furlough and Flexi Furlough.    Therefore before implementing any of the suggested changes above it is important to obtain formal HR assistance in order to prevent future issues for the Employer.

A good reference point for Employment issues is the ACAS website a link to which is below.

https://www.acas.org.uk/