YouGov’s recent survey of 2,097 British businesses paints a bleak picture, estimating a continued likelihood of significant numbers of redundancies expected over the coming months.
In response to these statistics and a record influx of calls to its helpline over recent months, ACAS has published updated helpful and comprehensive Guidance for employers on how to manage staff redundancies.
It is not compulsory to follow the Guidance but it does include details of important legal obligations and suggestions of best practice, which may be taken into account by Employment Tribunals when deciding whether an employer has acted reasonably in all of the circumstances when terminating employment by reason of redundancy. It is essential that employers act reasonably to avoid claims of unfair dismissal.
The Guidance also includes a key section on the important requirement for “employers to properly consult with their staff to seek their views on ideas that can help mitigate the financial difficulties”, together with a Guide on handling large scale redundancies. The special rules on collective consultation must be observed to avoid claims for failure to inform and consult where 20 or more employees are made redundant within a period of 90 days.
The guidance includes key sections on:
For additional information see our Myerson Guide to Reorganisation and Redundancy
There is no change in the law on redundancy but this additional guidance will assist employers in approaching this challenging area.
In relation to difficult issues such as fair selection and collective consultation requirements, legal advice should be taken on the specific circumstances. It is a failure in these areas that most often leads to claims of unfair dismissal in redundancy cases and claims for protective awards.
Aside from commercial issues, such as employee relations and reputational damage, Employment Tribunal claims can be very costly. Unfair dismissal compensation is capped a year’s pay or £88, 519, whichever is the lower. Protective awards are awards for failure to inform and consult in relation to collective redundancy and an Employment Tribunal can award up to 90 days pay in relation to each affected employee. Such claims present a huge financial risk where large numbers of employees have been made redundant.
Contact our specialist Employment Law team for legal support on this common but challenging area of employment law. If in doubt, please take advice. You can contact the Employment team at Myerson on 0161 941 4000 or via email at email@example.com.