redundancy

Time to be creative?

The figures announced today show that the economy has dropped by a record level of just over 20% in April. That comes on top of the announcements by Heathrow airport and Centrica that they are cutting thousands of jobs.

The timings of the announcements of job losses is no real surprise. With the Job Retention Scheme payments starting to taper down in August and employers being required to make contributions to pensions and National insurance payments, many businesses will be looking at how they can afford to keep employees on the payroll with little or no income. Although for small businesses NI and payment pensions will be relatively small, for an employer the size of Heathrow Airport, they will amount to tens of thousands of pounds. Larger employers have rules applying to them in terms of timescales for redundancy consultations when they are making more redundancies. If its 20 to 99 employees, they must start the consultation process at least 30 days before the redundancy date and if its more than 100, then its 45 days. If it’s 45 days from now that takes us to 27th July – just before the Job Retention Scheme payments change and employers have to contribute.

Employers in the SME market will be asking themselves the same questions as larger employers – how can I keep staff on and pay the contributions I will be required to with no income? This will be particularly difficult in the pub, café and restaurant trade and the small independent retailers. How can they have enough people in their premises spending money to make it commercially viable to be open when social distancing will severely restrict the number of people allowed in.

SME employers will undoubtedly be thinking about redundancy. This is often a much more painful process in a small business where there is much more direct contact between employer and employee, and often long-established relationships.

My advice is – try to make redundancy your very last option. This is the time to be creative in your working relationships with your employees. If you have a small core of long serving, trusted employees you might find that if you suggest some temporary flexible changes including everyone taking a cut in hours, even a cut in pay, or periods of unpaid leave. Although you can’t impose this sort of thing (unless you have very specific clauses in your contract of employment, and even then they could be subject to challenge) you might find that with consultation and agreement most staff would prefer some temporary reduction rather than termination of their employment. As long as your employees agree to the change, you can make it. You should make a written record of what has been agreed, together with built in reviews and, get a signed acceptance by the employee to make sure it is legally binding on all.

Tough times are undoubtedly ahead for all of us but if you are able to be creative and flexible with your staff, and they come on board with you, you may be able to preserve your skilled, trusted workforce to be ready to take advantage when things start to improve.

Myth buster

Employment law is an extremely complex area and can be an absolute minefield for businesses to keep up with, that’s why it’s important that your organisation isn’t caught out by one of the various employment law myths that exist.

Here are twelve of the most commonly held myths that continue to be heard and believed!

FAMILY PLANS

Myth
Asking about a candidate’s plans for a family at a job interview is illegal.

Fact
It is not actually illegal to ask about a candidate’s family or plans for having one at a job interview. However, you should tread very carefully because if an employer refuses to employ someone because of their family responsibilities, this would be sex discrimination. The candidate would have the right to use the interview questions as evidence to support their case.

Our advice
Questions that you ask should objectively relate to the job requirements and should be consistently asked of all candidates. For example, if travelling away from home would be acceptable to them or would they be happy working regular overtime.

RETRACTING A JOB OFFER

Myth
An employer can unconditionally retract a job offer if the employee has not started working for them yet.

Fact
A contract of employment may be formed between the parties even if the individual has not yet actually started work. If the employer wants to retract the job offer before employment has started they will have to end it by giving notice to the individual.

PERSONAL PRIVACY

Myth

Employees have no right to privacy in the workplace

Fact
Employees do indeed have a right to privacy in the workplace and this means that there is a limit to how far employers can go to keep tabs on their team. Although some level of monitoring is reasonable, perhaps to ensure the quality of work, employers must strike a balance between the needs of the business and the rights of the employee to protect their private lives. Generally, any interference with privacy must be no more than is reasonably necessary and the employer should have good reasons for doing so. Employers should also make sure that employees are aware of any workplace monitoring, and have a clear policy on when this will occur and that it is clearly communicated to all employees.

SICK LEAVE

Myth
Employees on long-term sick leave should be left alone.

Fact
Although employers should not put undue pressure on employees who are on long-term sick leave, they are entitled to find out more information about the illness. This would include consultation with the employee and, with permission, writing to their doctor (or any specialist) to find out about their condition and whether there is anything the employer can do to help accommodate their return to work, such as offering reduced hours. In addition, you might want to invite the employee to be examined by an independent specialist.  Employees also have a responsibility to keep employer’s informed of developments.

Our advice
Employers should definitely not make any decision about dismissal until they have explored the situation fully. An employee who is on long-term sickness absence may be protected under employment laws as a disabled person, whether the illness is physical or mental such as depression.  Reasonable communication is always advised.

TUPE

Myth
Employers cannot vary any contractual terms of new staff acquired through TUPE

Fact
Although the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) offers employees a lot of protection, once they transfer over to the new employer, this does not mean that their contracts cannot then be changed. However in order to vary a contract, the new employer must have an ‘economic, technical or organisational reason’ which entails changes in the contract to be made.

REDUNDANCY

Myth
Employees are always entitled to a redundancy payment if their post is made redundant.

Fact
Only employees with at least two years of continuous service are due a statutory redundancy payment if their post is made redundant.

If the employer offers a suitable alternative position with the same or suitable terms and conditions, and the employee unreasonably refuses to accept it, then they may lose the right to redundancy pay even if they have the necessary amount of service.

OFFENSIVE JOKES

Myth
Employees can only claim harassment if offensive jokes are directed specifically at them.

Fact
An employee who is offended by a joke or comment about sex, race, sexuality, religion or age can claim harassment, even if the jokes or comment were not specifically directed at them. It is irrelevant whether or not the perpetrator meant to cause any offence, it is the employee’s individual perspective that matters. Employers are liable for harassment by their employees at work and at work related events off site such as an office party or team event. However, employers can defend claims if they did all they reasonably could to prevent employees from harassing their workmates, such as having an effective equal opportunities policy in place, that is consistently enforced and in which all employees are trained.

PROBATION

Myth
Employees have no right to notice during their probationary period.

Fact
After one month’s employment, all employees are entitled to at least one week’s notice, even if the contract provides for less. This minimum notice period increases by one week for each full year of service (after the first 2 years) and up to a maximum of 12 weeks. However, if the contract provides more than the minimum notice then the longer contractual period will apply.

CHILD CARE AND PART-TIME WORK
Myth
Employees with young children have the right to work part-time

Fact
Employees with young children do not have an automatic right to work part-time, but they have a right to ask to work flexibly such as part time working (after six months’ service). Employers do not have to agree to such requests, but they must consider them carefully by following a set procedure and only refusing them on specified grounds, such as additional costs or impact on performance. In addition, refusing a flexible working request from a female employee may amount to sex discrimination, on the basis that women are more likely to be primary carers. Refusal can be justified, but the employer would need to have good reasons for doing so, and ideally, have evidence to support this decision

BANK HOLIDAYS

Myth
Employees have the automatic right to having bank holidays off.

Fact
Employees have no statutory right to take bank holidays off, their specific rights to holidays (including bank holidays) should be set out in their contract of employment. Similarly, there are no requirements that pay for working a bank holiday is any greater than working a normal day, unless this is outlined in the contract of employment.

MATERNITY LEAVE

Myth
Employees who are pregnant or on maternity leave cannot be dismissed

Fact
They can be dismissed, but if the reason for the dismissal is related to their pregnancy or maternity leave, then this amounts to sex discrimination and unfair dismissal. Sometimes an employee is dismissed for a fair and non-discriminatory reason, but a lack of evidence to back this up could lead an employment tribunal to believe that the pregnancy/maternity leave was the real reason for the dismissal. Employers should document clearly the reason for dismissal (such as poor performance) and ensure that other paperwork such as appraisals, warning letters and so on are provided which can support this.

DISMISSING OVER 65’s

Myth
You can dismiss an employee who is 65 without any claims.

Fact
There is no formal retirement age and any age-related retirement policy would be viewed at as being discriminatory based on age which is a protected characteristic under the Equability Act.  Employment policies should be based on competency and ability to continue the job.