What are the alternatives to redundancies?

Up to 1.7 million workers were on furlough at the beginning of August, which suggests that a lot of UK employers will be preparing to make changes when the Coronavirus Job Retention Scheme (CJRS) comes to an end on 30 September 2021.

Sadly, after a tough year, not all businesses will be able to bring everyone back to work. That means you will need to be aware of your options when it comes to those employees you can’t return to the business when furlough ends. We have a handy flowchart here that examines the range of options available to you as an employer – from short-time working and lay-offs to redundancy.

Redundancy may be the option some employers are considering most seriously right now. If this applies to you, we recommend you explore the alternatives first. Redundancy shouldn’t be your first option if you can help it.

What are your first steps?

Your very first step should be speaking to your employees about whether they would be willing to accept any changes to their employment to avoid redundancy. Employees may have some ideas for cost-cutting measures that you may not have thought of; it is in everyone’s interests for redundancy to be a last option.

If none of the suggestions work for your business, or if you need to take more significant action, then it’s time to consider the alternatives.

What are the alternatives to redundancy?

Flexible working

Flexible working has become more common in the last year or so. New precedents have been set by widespread remote working, proving that employees in many industries can work from home. Changes to hours have also been common, with some employees wanting to reduce their working time to enjoy a work/life balance. To avoid redundancies, you could propose more permanent changes to employees’ terms which may result in reduced days or hours of work.

But remember…

Please seek advice from our HR and Employment Law experts before changing terms. There is a specific process that must be followed when suggesting and agreeing upon different working terms. Read this free article to discover more about this process.

If you’re considering making any changes to your contracts or terms and conditions, give us a call on 0345 844 1111 to chat about how we can help.

Short-time working

If you can’t afford to have your workforce back on their normal hours for the time being, you could consider short-time working as a temporary measure. This option allows you to keep an employee on, but on a reduced-hour basis. It is intended as a short-term measure and must have already been agreed as an option with your employee in either:

• their contract of employment
• a national agreement for your particular industry
• a collective agreement between you and a recognised trade union

However, even with this prior agreement, you should still communicate fully with your employees before introducing temporary short-time working and keep them updated throughout. Also, be aware that if their weekly wages drop below 50% for more than four consecutive weeks, or six non-consecutive weeks in any 13-week period, they have the right to apply for a redundancy payment. They’re also entitled to Statutory Guarantee Pay if they have been employed for more than one month and you don’t provide them with a full day’s work during the time they would usually be required to work.

Lay-offs

Another temporary measure to consider is laying employees off. This is not the same as redundancy, but rather is a temporary period where the employee is not provided with any work for the entire working week but remains employed by your business. Employees on lay-off qualify for Statutory Guarantee Pay (currently £30) for the first 5 workless days in any 13-week period.

The below considerations apply to lay-off and short-time working; namely:

• You should have already agreed the right to lay-off and short time working with the employee
• You should discuss fully and keep the employee informed during lay-off and any period of short time working
• The employee can apply for redundancy pay after 4 consecutive weeks (or 6 non-consecutive weeks in any 13-week period) of lay-off or if their weekly wages drop below 50% for more than four consecutive weeks, or six non-consecutive weeks in any 13-week period.

Move employees into other roles

You should consult with employees to understand if you can move them into different areas of your organisation (‘redeploy’) to avoid redundancies. For example, by looking at:

• what transferable skills staff have
• if there are other vacant or new roles in the organisation that require those skills

Alongside any of these measures, you should also consider:

• letting go of temporary or contract workers
• limiting or stopping overtime
• not hiring any new employees

If none of these options work for you…

Then it is time for redundancy. One of the key elements of a fair redundancy process is meaningful consultation. This vital step helps the employee(s) understand what has led to the redundancy proposals and allows them to engage in the process.

Offer voluntary redundancy

It’s possible to give your employees the option to put themselves forward for voluntary redundancy.

It’s up to you as an employer whether to accept the volunteers. You should think about the wider needs of your business when you make your decision and make it clear to employees from the start that their voluntary redundancy will not definitely be accepted.

If you do give the option of voluntary redundancy, you should avoid the risk of any potential discrimination by:

• offering it as widely as possible, not necessarily just to those at risk of redundancy
• not pressuring or singling anyone out
• selecting employees in a fair way

When considering who to make redundant within your team, you need to consult on a fair criteria that will benefit your business long-term, but also so your people will understand the basis on which an individual may be selected for redundancy.

There is less demand for some roles during current times, so looking at these roles may be a starting point for redundancies. But it is essential that there is a strong business case for any redundancies at the outset of any process.

While redundancy is never a pleasant topic, it’s certainly one that requires careful consideration and expert guidance. Our HR and Employment Law experts have put together a checklist of five of the key things you’ll need to think about before embarking upon a redundancy process.

We’re here to help

No one wants to go through redundancies, but, unfortunately, they are sometimes necessary. Don’t feel like you have to take the stress of the process on your shoulders by yourself. We’re here to support you.

If you’re a client of ours already, you can call our free advice line on 0345 844 4848 where we’ll be able to offer our support to you 24/7.

If you’re not yet a client of ours and you want the advice and backing of a team of HR and Employment Law experts, feel free to give our team a call on 0345 844 1111 to talk through your business needs. Or simply fill out your details in the form opposite and we’ll be in touch as soon as possible.