Now's the time to be thinking about potential for future redundancies
IN some ways, it seems that the introduction of the coronavirus Job Retention Scheme (more commonly referred to as the furlough scheme) was a lifetime ago, yet it is still in its infancy.
But last week the scheme changed, with the welcome introduction of the ‘flexible furlough scheme’, giving employers the additional flexibility to bring back furloughed employees on a part-time basis. Greater employer contributions will be required from August through to the end of the scheme in October.
Despite the reopening of many sectors of the economy, normality has not resumed and is unlikely to resume for some time. Therefore, the inbuilt flexibility which Chancellor Rishi Sunak has developed is welcome, but it will unfortunately not assist all employers nor necessarily prevent the inevitability of re-organising businesses and or considering redundancies.
At this time, employers are considering how their markets have been, and may continue to be, impacted by the pandemic once the furlough scheme does end in October. While they are seeking to avoid job losses, and notwithstanding such Government support, the ongoing impact of the pandemic will inevitably leave some with no alternative but to consider whether redundancies may be necessary to preserve and safeguard the future of the business.
If this is the case, employment law must still be adhered to before making employees redundant. Locally if less than 20 employees are at risk, an employer is expected, as a minimum, to warn and consult employees individually, adopt fair selection procedures and consider alternative employment for those affected.
If the inevitability is that more than 20 employees may be made redundant, collective consultation obligations will need to be observed. One of the key things to keep in mind in the length of the collective consultation requirements in Northern Ireland – at least 90 days if 100-plus redundancies are proposed, or 30 days if between 20 and 99 dismissals are proposed.
Therefore, employers need to be assessing the shape of their business in the short to medium term now. It is important to note that a failure to consult trade union or employee representatives in accordance with collective consultation duties can lead to costly fines and may expose employers to other risks and claims.
Nothing about the current situation is straightforward and employers should be prepared for delays in normal redundancy time scales due to employees being furloughed or working remotely. Where employee representatives must be elected, this could add at least a week to the planning.
Employers should also take advice on how the furlough scheme interacts with their redundancy proposals to reduce the risk of falling outside the scheme’s eligibility requirements.
Any such business considerations are difficult to make for all manner of reasons, not least the impact on the individuals concerned and the business itself.
Seeking advice and guidance early, entering a genuine dialogue about the situation and having a clear and concise communication plan in place from the outset will be critical for those businesses bracing this potential aftermath of the pandemic.
Lisa Bryson is employment and immigration partner at Eversheds Sutherland Belfast