Many businesses have found that COVID-19 has changed their trading environment. Some may need fewer staff to reduce costs and some may need staff with different skills and experience because the needs of their customers have changed. For many, it could be the first time that they have had to deal with the need to let staff go as part of a restructuring exercise.
This isn’t an easy situation to deal with from an emotional or practical point of view but at the very least you want to make sure you handle the process in the right way. Your remaining staff can then see that the situation was handled fairly and the business will be protected against any potential claims for unfair dismissal.
In June alone, nearly 1800 companies said they planned to cut more than 20 jobs. There will be many more smaller firms not included in this number. The fact that Covid-19 presents unique challenges and may be a once in a generation crisis doesn’t mean that special rules apply. Every restructuring will have to follow a legally compliant process and be fair and non-discriminatory.
Take Advice Before You Act
If restructuring is likely, you first need to make sure you understand the legal rights and risks involved. You may have to defend your decisions and the process by which you made them in a tribunal. Not only can this be costly in terms of compensation and costs, it can also damage your reputation.
If you plan to make more than 20 redundancies at one establishment you will have to carry out a collective consultation process that must start a specified number of days before the first redundancies are made.
Failing to comply with the key procedural stages of the redundancy process is a common problem. The fact that you feel the need to act quickly won’t cut much ice with a tribunal. Some other employers succumb to the temptation to disguise a dismissal for another reason as a redundancy. Again, this is not allowed. Redundancy means that that job function is no longer needed
Another common problem is failing to consider at-risk employees for alternative vacancies. Acting in haste could end up being costly for your businesses.
Alternatives to Redundancy
There are sometimes alternatives to making staff redundant including reducing hours or pay. What you are able to do will be governed by the employment contracts you have in place. You cannot unilaterally change terms and conditions without consulting with employees and getting their agreement.
For many, this period of uncertainty will prove the value of making sure that employment contracts and procedures are compliant and geared to the needs of the business. Above all, this isn’t the time to take chances and hope you are doing the right thing. If you think that you might need to restructure, the Business Team at Powells Law is ready to help you get the process right.
If this has started you wondering whether your employment contracts and processes fit the needs of your business, this would be an excellent time to take advice and put the right safeguards in place.
