• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
  • Bedfordshire
  • Milton Keynes
  • Northamptonshire
  • London
  • Awards
    • NBEA 2023 Gallery
    • NEA 2023 Gallery
  • Podcast
  • Contact Us
  • About Us
    • Knowledge Hub
    • Sustainability
    • ATB TV
ATB Logo

All Things Business

First For Local UK Business News

  • Education
  • Professional Services
    • Legal
    • Finance
    • Recruitment & HR
    • Creative Marketing
  • Property
  • Environment
    • Wellbeing
  • Industry
    • Industry
    • Manufacturing
    • Motors
    • Logistics
    • Technology
  • Events
    • Events
    • Food & Drink
    • Sport
  • News

Alternative options to redundancy for organisations

Legal, News | September 1, 2020

With furlough periods coming to an end (31 October), there is likely to be a spike in redundancies. While the government scheme was there to protect employees from being made redundant from the outset, it has been challenging to digest the enormity of the effect that COVID-19 has had on the economy and, in particular, employment. The scope of the effect will likely not be realised until the end of the year.

In planning ahead, organisations have a number of options to consider, not just redundancy. Those other options include restructuring (which may or may not result in a redundancy situation) and/or consulting on changes to employment terms (e.g. reduced hours and/or pay).

Where an organisation concludes that it may have to make some changes to the structure of its business following on from the pandemic and those changes may mean redundancy is a likely outcome, it will need to conduct any processes in a fair way. Failure to do so may well cause organisations additional troubles, including potential unfair dismissal claims.

Key for all organisations will be:

  • Identifying if restructures give rise to redundancy
  • Embarking on appropriate consultation exercises with all affected employees in a fair manner
  • Considering if voluntary redundancy could be offered to employees before the formal redundancy process begins – some employees may choose to leave the organisation of their own accord
  • Exploring the appropriateness of asking employees to agree a variation to their contract terms – e.g. in respect of reduction of salary and reduced hours
  • Redeploying employees to other parts of the organisation – this may involve giving employees the appropriate training as required

Underpinning all of the above is making sure the consultation process is right. All affected employees must be consulted on an individual basis and, where an organisation is making redundancies of 20 or more employees, a collective consultation will also need to take place and the appropriate forms will need filing.

But even where the consultation process is squeaky clean, claims may still be brought against the organisation by a disgruntled employee. The most effective way an organisation can avoid a claim being brought against them is entering into a settlement agreement.

If an employee has more than two years’ service then the employee will be entitled to statutory redundancy pay. This is to be calculated at full pay (100%) and not by the furlough payment that the employee may have been receiving (80% capped at £2,500 per month). Where settlement agreements are used, an organisation will typically make an ex-gratia payment to the employee which is additional to any statutory redundancy payment. Approaching the settlement agreement conversation requires a similar degree of careful handling as the consultation process; otherwise it could end up working against the organisation.

And even if the organisation avoids the need for making redundancies when the furlough scheme ends, the way we are living our day-to-day lives will still be in its infancy and evolving. This change may not be only short term. Organisations will need to be flexible as well as think about its employees. For example, it should look at an employee’s situation on a case-by-case basis and be mindful of the implications and risks involved if it acts unreasonably. By adopting this approach it’s hoped that increasing numbers of organisations will ultimately survive the pandemic and continue to be employers for many generations to come.

Northamptonshire

Related stories

  • DFA Laq Northamptonshire
    December 1, 2023

    Important changes to employment rights on the horizon

    The government has published the Draft Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 which will amend the WTR and TUPE…
  • iOTA Interiors Northamptonshire
    December 1, 2023

    Style and sustainability prove to be a winning combination

    Sustainability has been part of the ethos of iOTA Interiors for some time, and now that commitment has been recognised with an…
  • DBFB Northamptonshire
    December 1, 2023

    Coveted framework success pivotal to growth prospects

    In a significant achievement, telecommunications company dbfb has clinched positions on three lots within the highly coveted Crown Commercial Services (CCS) Network…

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Stay up to date on All Things Business

Get the latest business round ups, stories and podcast episodes delivered straight to your inbox.

LISTEN NOW
Podcast Episode 42 I Awards Round Up
LISTEN NOW
Podcast Episode 41 I Our Big Week
LISTEN NOW
Podcast Episode 40 | Eamonn Holmes
previous arrow
next arrow
Slider

Online Edition

Northamptonshire edition, click here
Milton Keynes edition, click here
London edition, click here

Most Read

  • Peli BioThermal Award Success
  • Northampton Woman’s Cancer Battle Inspires Fitness Challenge To Help Raise Thousands For New Charity
  • Pallets of Hope campaign funds £27,500 worth of Christmas essentials for Northamptonshire communities facing hardship
  • Silverstone Museum Announces Appointment of New Trustees
  • Delapré Abbey confirms Christmas programme as site’s transformation into a winter wonderland gets underway

Footer

REGIONS

Northamptonshire
Milton Keynes
Bedfordshire
 

COMPANY

About Us
Contact
Awards
Podcast
Knowledge Hub
Sustainability
Request A Copy

Northamptonshire Office

1 Queensbridge, Northampton,
NN4 7BF
Tel: 01604 250 900

Milton Keynes Office

The Pinnacle, 170 Midsummer Boulevard, Milton Keynes,
MK9 1BP
Tel: 01908 030 480

London Office

25 Bedford Square
London
WC1B 3HH
Tel: 0208 176 0176

Follow us on

  • Facebook
  • Instagram
  • LinkedIn
  • Twitter

All Things Business is a publication produced by Augmented Group. Registered in England No. 4904401 | Privacy Policy