Furlough and redundancy – Key date

15th September 2020 Employment

The 16th September 2020 marks the final date for employers to commence conducting any minimum 45 day collective consultations on redundancy prior to the end of the furlough scheme on 31st October 2020. It is vital that employers who may have to make staff redundant following their period of furlough consider whether they are required to follow the procedure now to avoid liabilities later.

Do you need to consult? In any situation where an employer is contemplating making more than 20 redundancies at one establishment in a 90 day period there are specific rules on collective consultation which need to be followed. Where this is the case, the employer must consult with a trade union representative or an elected employee representative who will be representing the employees affected.

When is a 45 day consultancy period required? There is a minimum consultation period of 45 days in situations where 100 or more redundancies are contemplated. The consultation is counted as ongoing until anyone is dismissed. Employers must notify the Redundancy Payments Service before any consultation starts and this will mark the start of the 45 day period.

What should be considered in consultation? When in consultation with the Union or employee representative, employers should ensure that the following points are considered. There may be further considerations depending on the situation:

  1. Whether there are any ways to avoid redundancies;
  2. The reason for the redundancies;
  3. The numbers and categories of employees involved;
  4. How you plan to select employees;
  5. How to keep the number of dismissals to a minimum;
  6. Whether there is any way to limit the effect of redundancy on the employees involved; and
  7. How the redundancy payments will be calculated.

What steps should be taken following the consultation?

  1. Employers should agree a notice period and a leaving date with the employee so that there can be no confusion about when they will cease working for you;
  2. Employers will need to calculate the employees’ notice and redundancy pay. Where employees have been on furlough, these calculations must be in relation to their full rate of pay, not their reduced furlough rate.

It is vital that employers are aware of the process and the rules surrounding redundancy, as well as how this ties into the furlough scheme, in order to ensure that they do not unintentionally fall foul of the rules. If you are an employer looking for guidance on the correct processes to follow, JMW Solicitors LLP can help. Please contact Paul Chamberlain on 0161 838 2762 or paul.chamberlain@jmw.co.uk.

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Paul Chamberlain is a Partner and Head of Department located in Manchesterin our Employment department

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