Redundancies and the CJRS
Restructures and redundancies are likely to be stressful and emotional. Employees with at least two years continuous service with the same employer have a right not to be unfairly dismissed which can result in redundancies being very costly if the correct process has not followed. It is advisable to seek professional assistance from the moment that an employer starts to consider making any changes.
The time is coming
Although employees can continue to remain fully furloughed, employers should start considering if they will need to make any redundancies in the future. This is especially pertinent if employers will require Government furlough support to pay at least some of the employees’ notice period.
As ACAS explains, the minimum time period before any employees can be dismissed is as follows:
Number of Proposed Redundancies: Minimum consultation period
20 – 99: 30 days
100 +: 45 days
In addition, employees are entitled to a notice period which starts after the redundancy consultations have been completed. The notice period is based on how long an employee has worked for the company.
The statutory notice period is as follows; however, any contractual period may be longer and consequently the employment contract must be checked:
Length of service: Notice you must give
1 month – 2 years: At least a week
2 years – 12 years: A week’s notice for every year employed
12 + years: 12 weeks
In line with the above, if 20 or more employees are to be made redundant, and they have worked for the same company for at least 12 years, then the whole process could take 16 weeks which currently would take us to the end of September. The furlough scheme is due to fully close at the end of October, and as explained the Government support will start to decrease from the start of September. To this extent employers should now start to consider what action they may need to take.
Redundancy consultations whilst employees are furloughed
· Employees can be consulted with whilst on furlough.
· Trade Unions and employee representatives can engage in consultation periods whilst on furlough.
· Consultations can be conducted virtually through video meetings.
Redundancy Payments and the CJRS:
· Notice needs to be paid at the employee’s full salary.
· Employers may currently use the grant to claim back 80% of the notice, and the employer will be required to top this up by 20%.
· The furlough grant can be used to pay an employee’s notice period but cannot be used for payment in lieu of notice (PILON) or redundancy payments.