Redundancy after furlough - employment law advice and key considerations

8 September 2021
The extended furlough scheme is due to end on the 30th of September, and while the scheme has been a lifeline for many businesses throughout the pandemic - businesses may be considering how they will manage employees and whether there may need to be a restructure of staffing requirements.
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With the furlough scheme end date soon approaching, one consideration employers will likely have to make is whether to make staff redundant. Discover in today’s blog what rights employees have and how to conduct a fair and lawful redundancy.

For all employment law enquiries, please do not hesitate to get in touch with our Employment Law Solicitors in Colchester today.

Rules on notice

Firstly, employers need to factor in the length of notice periods when considering headcount reduction. Previous rules stated that employers could still claim for those employees serving their notice periods. This was a significant saving for employers, however, the rules of the scheme changed on the 1st December 2020. This means that it is no longer possible for an employer to claim furlough money for any employee serving their notice. In addition, it is not possible to claim any money from the scheme towards redundancy payments that may be due.

As an employer, it’s also worth considering whether employees have any accrued but not taken holiday, which may need to be paid out on termination of employment. An employer may decide it’s better to act sooner, especially given they will be liable for 100% of the salary from the 1st of October 2021.

If you have employed staff who have two years or more of continuous service, they are entitled to statutory redundancy and can claim unfair dismissal if the reason for dismissal is not genuine. 

Possible alternatives

When you are considering redundancies, employers should always consider possible alternatives, given the cost involved, particularly for higher paid and long-serving employees. Alternatives could be offering the proposition of reduced hours or moving the employee into an alternative role within the organisation.

An employer intending to make 20 or more redundancies within a 90-day period will also be obliged to collectively consult with its employees. This involves nominating and electing employee representatives, as well as consulting for a minimum of either 30 or 45 days (depending on the number of employees affected) this is a time-consuming task for any employer, and for this reason, it makes sense to plan such a process in advance.

Give the employee an opportunity to respond

Employees have the right to respond and comment on any proposal, as well as being considered for any suitable alternative vacancies within the company. If an employer fails to follow a correct procedure, there is the risk of unfair dismissal claims from employees affected.

Therefore, if you are needing to make headcount reductions as the furlough scheme draws to an end, make sure you plan now and do not wait until the 30th of September to ensure the process goes smoothly and avoids time-consuming and expensive claims.

Our Employment Law Solicitors in Colchester cover all aspects of the legal relationship between the employee and employer. Get in touch with Karen Morovic for support with employment law matters. 

Speak to an expert:
Karen Morovic 
01206 576151