HR Articles

Speculators predicted a surge in redundancies this autumn as the Coronavirus Job Retention Scheme comes to an end on the 30th September. However, this surge doesn’t appear to be forthcoming.  

The furlough scheme has entered its final two months. The scheme has cost an estimated £64 billion and supported around 11.6 million jobs since its inception on 20 March 2020. At its peak in January of this year, it is estimated that some 5.1 million workers were on the furlough scheme.  

As pandemic-related government support for businesses starts to taper from the end of this month and with flexible furlough due to end altogether at the end of September, employers in some sectors will face difficult decisions impacting their workforce, including possible restructures and redundancies.

Twenty-three employees have won the maximum ‘Protective Award’ of 90 days extra pay because their employer failed to ‘inform and consult’ with them about their redundancies. Under S188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULCRA), employers must follow collective consultation rules where it proposes to make over 20 redundancies in a 90 day period.

The first payment to include in a redundancy package is the statutory redundancy payment. This must be paid to all eligible employees and the amount is set by legislation. Other mandatory payments on termination would also include accrued but untaken annual leave and unpaid wages. Some employers, where the contract allows, may make a payment in lieu of notice.

The Employment Appeal Tribunal decision in Verizon European Works Council v Verizon Group highlights the risk of bypassing established statutory mechanisms for informing and consulting with the workforce. Where these arrangements are national works councils or European Works Councils (EWCs), this can lead to penalties of up to £75,000.

In the recent case of Aramark (UK) Limited v Fernades, the EAT held that it was not  unreasonable for an employer to decide not to include the Claimant on a list of bank workers in a redundancy situation.

I have only worked for my employer for a short time, am I entitled to redundancy pay?

The government has announced a new law, effective from 31 July 2020 introducing changes regarding payments on termination of employment to employees who are, or have been, furloughed.

As the furlough scheme starts to be phased out from the end of this week, the ongoing economic Covid-19 related downturn means that increasing numbers of businesses are having to announce redundancies.