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Alternatives to Redundancy: Employment Lawyer Advice

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Calendar February 16, 2021

There has been economic since the coronavirus (COVID19) outbreak. This has impacted business in unimaginable ways.

As a result of the outbreak businesses are looking into steps to take to ensure that they can continue to operate and give their employees the best chance to survive in this climate.

The employers would need to take the measure below firstly:

  • The need for employees’ consent and if so, how will consent be obtained?
  • Collectively inform and consult.
  • The impact any measures will have on the morale of the workforce and the reputation of the company.

There are many alternatives to redundancy, here are some alternatives to redundancy that businesses can seek in order to avoid redundancy.

Job retention scheme

The main one that we have seen over the last year is the Job retention scheme. The UK Government has introduced this job retention scheme which helps employers to pay their employees’ wages. Regardless of how big or small the business is they would be eligible for the scheme. Employers can apply to HMRC and get up to 80% (up to a cap of £2,500 per month) of their employee’s wages.

Annual leave

Employers can ask employees to take contractual annual leave allowance, provided this notice is given. This may give the employers the opportunity to plan effectively and ensure a smooth running with employees are back. It is vital that the employers are open and honest with their employees.

Period of unpaid leave

Employers may ask staff to agree of a period of unpaid leave for example is the business needs to lose and if they are not eligible for the Job Retention Scheme. This arrangement would need to be properly documented.

Change of Terms and Conditions

When consented between both employer and employee, you would be able to reduce working but again it would have to have discretion on both employer and employer before implemented.

Please note If there are any changes to terms and condition in regards without consent would be a breach of contract and employees pay claim through unlawful deduction of wages.

Lay off and Short-time working

Employers can look to layoff staff on a temporary basis or even reduce their working hours. A lay off can be understood as providing no work for their employees for a week or more, nor the employer would need to pay the employee however the terms and conditions must be clear in explaining these terms.

The employer cannot impose this without the consent of their employees and if contracted it must be clear that they will not receive their normal salary. For short-time working, this would be a reduction of hours and would receive a proportionally reduced pay. Again, this must be contractual and both employer and employee need to consent to this.

Restricting recruitment

You would be able to withdraw employment offers at any point before acceptance without having to give notice or payment in lieu. If it does get accepted there are preconditions attached, this will become a binding employment contract, even if the employee has not started start work, failure to give notice or pay will be breach in contract. However, employers can delay the start date and both employer and employee would need to consent if the offer is already accepted.

Redeployment and retraining

If a part of a business has been affected more than another part, it can be possible to retrain the employee with transferable skills to another department for example. This can be on a temporary basis, but this change would need to be in writing. It would need to be ensured that they are properly equipped and trained to perform the new role.

Alternative Job Role

If the employee is at risk of redundancy the employer would be able to offer an alternative suitable job role, the employee can refuse and ask for the redundancy payment instead. The employer would be required to:

  • Offer the new job in writing or orally (preferable in writing)
  • Make the offer before your current job ends
  • Make sure the new job starts within four weeks of your current job ending
  • Give you enough detail about the job to understand what you would be doing and how it differs from the current job role

The employee would be entitled to spend four weeks trying out the alternative job role offered. If more than one job role has been offered the employee would be able to try each of the roles for four weeks on a separate basis. Your trial period could start up to four weeks after your current job ends. No matter when your trial period starts, you will still get four weeks to try the alternative job. The redundancy may be unfair if your employer does not let you take the four-week trial.

Settlement Agreements

Settlement Agreements can be beneficial to employers if they are looking to remove employees from the business. Any discussions that take place will be ‘protected’ this means that they cannot be brought in front of an Employment Tribunal in any future legal action, this is seen to be a positive arrangement.

Employers must be careful as not all types of conversations will be protected such as discrimination as they will not be protected.

The downside can be that the employer would pay more to terminate the employee’s contract than anticipated.

Voluntary career break/sabbaticals

This would need to be arranged by both employer and employee and would be a great way to essentially save the costs for a fixed period of time. This would give the employer to retain valuable staff and giving employees to do something for themselves i.e., study, travel, etc.

Early retirement

If the employer pension scheme allows, there can be a possibility of early retirement with relevant employees. When seeking volunteers for early retirement, employers need to be careful and ensure that the termination of employment does not give rise to any potential age discrimination.

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