FURLOUGH ENDS TODAY!!!!!! An insight into the Implications of Covid 19, Furlough, Unfair Dismissal and Redundancy

Steve Hirst

Specialist Employment / Discrimination ?Law Barrister

Employment Law Article

FURLOUGH ENDS TODAY!!!!!!

An insight into the Implications of Covid 19, Furlough, Unfair Dismissal and Redundancy

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What is Redundancy?

Firstly it is important to know what redundancy is.???Well, the redundancy provisions are contained in the Employment Rights Act 1996 (ERA).

S 139(1) ERA Redundancy

(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to—

(a) the fact that his employer has ceased or intends to cease—

(i) to carry on the business for the purposes of which the employee was employed by him, or

(ii) to carry on that business in the place where the employee was so employed,

or

(b)?the fact that the requirements of that business—

(i) for employees to carry out work of a particular kind, or

(ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer,

have ceased or diminished or are expected to cease or diminish.

Please note that with regard to cease or diminish, this is either permanently or temporarily.?

Eligible for Redundancy

Employees must have 2 years continuous service by the relevant date before they are eligible to claim a redundancy payment.

Therefore the focus of a redundancy will be on the following redundancy situations:

o??Job

o??The work place

o??And

o??The employee

What is Furlough?

The furlough scheme protected millions of jobs during the pandemic and this scheme comes to an end today on 30th September 2021. In essence the Government has been paying or contributing to wages of many workers who could not work due to the pandemic.?It is assumed that many employers can’t afford to employ some of these workers when furlough ends.

Jobseekers Allowance

If a worker is eligible they could claim jobseekers allowance and this currently is ￡59.20 a week if under 25.??If a person is over 25 the amount is ￡74.70 a week.

Best Practice

The Government have supplied guidance and have been forthright in their belief that throughout the pandemic, when peoples’ jobs are put at risk, the practice of following ?the correct and resolute dismissal and redundancy procedures should be adhered to.

Equality Act 2010

It is important to be aware of the provisions as detailed in the Equality Act 2010 with regard to discrimination, as this could be a factor that encroaches on the redundancy of an employee or employees.?

Redundancy

Redundancy has become prominent in people’s minds and therefore it is imperative that all parties are aware of the provisions and follow the detail of the codes, cases and statutes. If they are not followed it is possible that the redundancy could be seen and decided upon in an Employment Tribunal as an unfair dismissal.

Unfair Dismissal / Redundancy

It is possible that employees with the requisite minimum work time period of 2 years’ service can claim Unfair Dismissal, ?if they believe that they were dismissed for a reason, which they consider to be unlawful.?

On the other hand, a redundancy can be a fair reason for dismissal if the circumstances demand this action and the correct procedures are followed. ??

Re-Employment

If the employee or employees are re-employed by the employer or associated employer they may not be entitled to a redundancy payment.??

Back in 2005 I was successful in representing a Local Government local authority in an Employment Tribunal arguing such a case over the period of a 10 day hearing. ?

Employment Tribunal

If the circumstances are presented to an Employment Tribunal to deliberate on whether the redundancy was a fair reason for dismissal, they will hear evidence presented by the parties to ascertain the reasonableness and fairness of the Redundancy. ??If the test for Redundancy is not proved then the Redundancy will be an unfair or a wrongful Dismissal.

How is the Redundancy Payment Calculated?

S162 of the Employment Rights Act 1996 (ERA) governs redundancy payments and is based on age, length of service and a week’s pay. ???????????????????????????????????????????????????????????????????????????????????????????????????

From the date of employment a worker is entitled to:

·????????1 ? weeks gross pay for each complete year of continuous employment in which the employee was 41 years or over.

·????????1 week gross pay for each earlier year when the employee was 22 years or over.

·????????Half a week’s gross pay for each earlier year.

·????????The total number of years is a maximum of 20 years

Presenting an Employment Tribunal Claim

An employee must within 6 months of the dismissal present a claim to an Employment Tribunal.?However in exceptional just and equitable circumstances a Tribunal could extend this time limit to within 12 months from dismissal.?

Trade Union and Labour Relations Act (TULCRA)

Duty to Consult

As I have referred earlier in this article it is important to adhere to the law. TULCRA was enacted in 1992. I suggest that readers should have regard to section 188 TULCRA.

?An employee is entitled to a consultation with their employer if they are being made redundant. This involves speaking to them about:

·????????why the employee is ?being made redundant

·????????any alternatives to redundancy

If the employer is making up to 19 redundancies, there are no rules about how they should carry out the consultation.

If the employer is making 20 or more redundancies at the same time, the collective redundancy rules apply.

Section 188 TULCRA ?

S188 TULCA denotes the following: ?

·????????An employer who wishes to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less must consult with representatives.?This could be with the union or unions, elected representative or representatives or with the employees or individually with an employee.

·????????If a 100 or more employees are to be made redundant at one establishment within a 90 day period the employer must consult at least 45 days before the dismissal takes effect

·????????Between 20 and less than 100 employees, the consultation should be within 30 days

·????????Please note that s 188(7) (TULRCA) designates a special circumstance defence where it is not practical for an employer to comply with the consultation laws.??However, that said it is important that people adhere to the law and consultation is an important process to adhere to.

Please note the full particulars of s188 TULCRA from the Government website.

What is consultation??

Consultation is an employer disclosing information about ?possible redundancies and the reasons appertaining to the proposed redundancies, to the representatives or to the employees or employee.

There must be an attempt to try and seek agreement, consult on ways of avoiding dismissals, reducing the number of employees to be dismissed and an attempt to mitigate the consequences of dismissal. The employer must also disclose the method of selection.

If an employer fails to adhere to s188 they could be ordered to pay a protective award for 90 days full pay.

HR1 Form

It is important to understand that an employer has to complete a HR 1 form, when they propose making twenty or more employees redundant.?The form is used to inform the Redundancy Payment Service of potential redundancies within a business. If a business does not provide the information, the law will be broken and this is a criminal offence.

At all times the Buzz word to abide by is “Reasonableness”

If a redundancy matter is presented to an Employment Tribunal one of the factors the Tribunal will hone in on is whether it was reasonable to make an employee redundant.?Reasonableness is the buzz word and this derives from the case of Williams’s v Compare Maxim. ?

Fair Redundancy

So what is a fair redundancy???A fair redundancy involves planning and reasonableness on the part of an employer.??It is extremely important that an employer applies a fair procedure bearing in mind the following:

o??A fair selection procedure with an objective standard

o??Timely warnings

o??Timely consultations

o??Consideration of alternative employment including the process of bumping!

o??Undertaking an objective criteria throughout the process.

An important case that clarifies these factors is Polkey v AE Dayton 1988.

Workers who are sick

It is notable that workers unable to work due to self-isolation, or a diagnosis of Covid 19 will usually be placed on sick leave until fit to return to work.

Pool for Redundancy

What is a pool of employees for redundancy purposes?

It is important that the process of pooling is adhered to, as it enables an employer to consult about a potential pool of employees that could be subjected to redundancy.???

?A redundancy pool is usually formed via a complicated procedure in regard to its composition. Simply put, if there is a link between work that is abating and a worker or group of workers, then a pool could comprise a person or people undertaking that work.?Another link could be the number of employees undertaking the same work.

Bumping

Many people ask what is bumping?

A Tribunal will focus on how the pool of employees for potential redundancy was compiled and whether the compilation and composition of the pool is reasonable.??It is at this stage that an Employment Tribunal will consider the process of bumping.?Bumping occurs where one person is potentially at risk of redundancy is transferred to another role, currently being carried out by another employee, and that employee would be made redundant instead of the first employee.

The Tribunal will want to ascertain that the employer has thought about the constitution of the pool.

Last in First Out (LIFO)

Last in First Out (LIFO) was a process that was at one time often used.?However there is doubt over this process now, due to the introduction of the Employment Equality (Age) Regulations 2006, and this process has lost some of its efficacy.

Selection Processes

A selection processes can concentrate on the following, which it is important to point out, is not an exhaustive list:

o??Standard of work of the employee

o??Attendance of the employee

o??The experience of the employee

o??Aptitude

o??Any disciplinary the employee has been subjected to.

o??Whether the employee has been flexible.

o??The quality of a persons?

Please bear in mind the buzz word at all stages is always “reasonableness”.

Consultation and Appeal

It is vitally important to consult with the employee, employees, elected representatives or unions.

At this stage it is important to appreciate that there should also be an appeal offered to the workers who are selected for redundancy.??

An employer must be at all times open and transparent with the employee on how the employee was selected for redundancy.???If the employee, for instance has been scored, ?in regard to the above criteria, it is recommended that the employer explains the process and the decision made and how the scoring was undertaken.?

Written Notes

Good practice should ensure that employers should compile written notes at all stages of the redundancy process and keep the notes as they may be of evidential benefit if there is an Employment Tribunal case.

Vacancies in the Employers Establishment

The criteria relating to redundancy changes when interviewing employees for position from an objective criteria to a subjective criteria. This could occur after a reorganisation has taken place and a vacancy arises. The application for a vacancy does not work on the same principles as the selection process for redundancy.

The Imposition of Covid 19 / Redundancy / ?Furlough

When the Job retention scheme was introduced, the Government confirmed that that employees may be made redundant whilst on furlough or after furlough ends on 30th September 2021.?

?The Government have confirmed that employers will need to decide whether their furloughed workers can return or whether they will be made redundant.

Consultation should still be managed, even if that is via a video platform.?This can be on an individual or collective consultation.???Please remember that all employees have a constituent right to be accompanied at the consultation.

·????????A fair reason for redundancy must still be paramount in people’s minds.

·????????All consultations should precede any decision about redundancy.

·????????Reasonableness should be and will be considered at all times.

If after furlough ends the employer decides to keep some of their workforce and make the others redundant, the employer must impose on their reasoning, reasonableness and as highlighted prior, a fair and comprehensive selection process.

If the employees have been shielding then be aware that the selection process could constitute discrimination.

Also as highlighted prior in this article the employer is obliged to consider alternatives to dismissal. ???

Employers should appreciate that redundancy calculations for pay should be based upon 100% of the employees wage and not on the reduced contribution furloughed rate. ?

Contact Steve Hirst

Barrister

Clerksroom

[email protected]

My Direct Telephone Number 07 881 772 077

Gregg - Chief Clerk?for Solicitors Instruction?01823 704 073

Rory / Sam?for Direct Access 01823 704 096

Disclaimer ???????????????????????

These tips are for information purposes only. Nothing should be relied upon as a substitute for legal advice and nothing written should be construed as legal advice or perceived as creating a lawyer- client relationship.

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