Everything you need to know about making furloughed staff redundant

May 11, 2021

Making staff redundant is never something enjoyable. With the challenges the last year has thrown at businesses with COVID lockdown restrictions and the minefield of furlough the situation can be even more complicated.

 

So, what do you do when you have to make the difficult decision to let staff go and they are on furlough?

 

Follow processes to a tee..

 

It is important to note that although we are still yet to return to normal, nothing has changed with the legalities of making redundancies. The process of redundancy must be followed thoroughly to avoid tribunal. The redundancy process looks like this:

 

-       Ensure making redundancies is your last resort

-       Consult with at risk staff

-       Make the decision on which members of staff are to be made redundant

-       Give the staff notice

-       Determine redundancy pay

 

Obviously, this process may be more challenging than usual if staff are on furlough and not at work.

 

Is it definitely the last resort?

 

Alternatives to redundancy must be considered before making the decision. Under normal circumstances other measures can include:

 

-       Pausing recruitment

-       Making pay decreases or freezes

-       Reduction in overtime

-       Letting go of any temporary workers

 

Now you will need to consider whether you can keep your employees on furlough.Available until the end of September, the job retention scheme was designed to prevent redundancies so if you can, take advantage.

 

If you can’t afford to keep staff on furlough or your company’s needs have changed and you have exhausted all other alternatives, start the redundancy process.

 

Reach out to your team

 

It is important to contact your staff before beginning consultation. Although you can’t make staff redundant over email, sending an email is appropriate to give them prior warning and give them the opportunity to prepare.

 

Your email should make the situation clear and give reasons why redundancies are being considered. It could include details such as:

 

-       Making staff aware they are at risk of redundancy

-       Explaining the process

-       Time and date of the first consultation meeting

-       How the meeting will be hosted. Online or in person.

 

Stick to the facts to try and keep any back and forth to a minimum. If making staff who are on furlough redundant it is important to consider that they will not be checking work emails so you will need to send this to their personal account.

 

Staff consultation

 

When undertaking redundancy consultations, it is important to facilitate an in depth talk where staff can talk openly and honestly and ask questions they may have.

 

As things start to open up and face-to-face meetings can take place (at a distance) it may be preferable to host these meetings in person. If, however this isn’t possible a video call is the next best thing. Either way it is important you can see each other’s faces so you can pick up on employees’ body language and expression which will help to steer the conversation.

 

Collective consultations

 

If more than 19 employees are affected, you will need to carry out a collective consultation. This means informing the recognised trade union, or employee representatives regarding the process and also consulting the team at least 30days before any redundancies are made.

 

You will also need to make the Redundancy Payment Service (RPS) aware of your plan prior to consulting staff. As they act on behalf of the Government, you could be fined if you do not inform the RPS.

 

Make your final selection

 

In order to make a fair decision, a ‘selection pool’ should be set up, meaning everyone is put in to at risk groups based on their job role and skillset.

 

Using furlough as a sole reason for putting someone at risk could lead to a tribunal for unfair dismissal.

 

 

Give notice and determine redundancy pay

 

As of July2020, new laws mean redundancy pay outs should be based on normal wages, and not furlough rate. As such, your furloughed staff have the same rights as full-time workers. Once pay has been calculated, employees can be issued with their contractual notice, making clear money owed to them.

 

Can I still claim furlough during employees’ notice period?

 

Unfortunately, if redundancies have been made since December 2020 employers cannot claim furlough for any staff on their notice periods – this includes both contractual and statutory notices.

 

We can help

 

If you are considering redundancies and don’t know whereto start, we can help you to navigate the process. Give us a call on 01509 861262 or email us at hello@colaw.co.uk to speak to one of our experts!

 

 

The information provided in all of our blogs reflects only a narrative of some elements to consider on the topic. The blogs do not contain considered legal advice and should not be relied upon as advice. Please see our website terms and conditions for full details of our disclaimer. If you are interested in obtaining advice, please contact one of our lawyers who will be happy and able to advise you on your own particular circumstances.