At the time of writing, we are part way through month 3 of the furlough scheme. Attention is now moving away from getting employees furloughed to what happens next. But what happens if you don’t feel you can continue your business in it’s current format? In that case, you may be wise to start thinking …
Redundancy and Reorganisations
What is a redundancy?
Redundancy is the term used when work of a particular nature reduces or stops completely at a particular establishment. This means that you don’t need employees performing work on a particular task at the location in question. What is doesn’t mean is that you stop that work completely. You may be consolidating that work to another location. It also doesn’t necessarily mean you are reducing headcount overall. It may just mean you need different skills and can not reasonably retrain your existing employees to perform these new tasks.
What do you need to prove to make it a fair redundancy?
To be a fair redundancy, you need to demonstrate there is a reason for it to occur. This is what they call an ETO reason:
Economic. That it is not economically viable to continue that work in that location.
Technical. You may bring in technology that automates part of a process or allows one person to complete the tasks of 2 or more.
Organisational. That there is a more efficient way of organising the workforce.
If you have an ETO reason, then you should be able to fairly make employees redundant. Then you need to ensure it is done in the correct manner.
What are the consultation requirements of redundancy?
If you are putting 20 people or more at risk in one establishment, you must consult with them for at least 30 days. This doesn’t necessarily mean you are making 20 employees redundant. If you have 30 people performing a role and plan to make 15 redundant, you would have to collectively consult with all 30.
This requirement increases to 45 days when you have more than 100 impacted.
Collective consultation requires you to elect representatives (if you don’t already have a recognised union or bargaining unit). You then have to meaningfully consult with them. This means you share all relevant information with the representatives and allow them to present a counter proposal.
Do you need to individually consult as well?
Yes. This shouldn’t start until the collective consultation process has been completed.
What happens if less than 20 people are impacted by redundancy?
In that case, you don’t need to consult collectively but you should hold at least 2 meetings with impacted people.