Redundancy & restructuring
The government’s job retention scheme has offered some immediate help to organisations during the Covid-19 pandemic. However with this due to come to an end, businesses are already starting to look at how to manage the longer term economic impacts of Covid-19.
Most employers will have already taken steps to reduce operating costs. In terms of staff costs, recruitment freezes may already be in place, discretionary benefits (e.g. bonuses) might have been cut back, contingent staff may have been let go, and fixed-term contracts might not have been extended. This makes the prospect of reabsorbing all payroll costs at the end of the furlough scheme even more challenging. As the scheme comes to an end, employers need to consider how to manage these costs moving forward: redundancies, restructuring and other cost control measures such as pay cuts will be unavoidable for many.
No employer wants to make redundancies, and most will try resist for as long as possible. Businesses will go out of their way to protect their workforce, keep up morale and maintain goodwill. Employers should therefore think creatively and look at other alternatives that may better suit the needs of their business. Our Inbrief summarises some of the options and examines how to avoid falling foul of the legal procedures and obligations that might come into play. The UK has, however, been in lockdown for a number of weeks already, the details of an exit plan are far from clear, and the crisis is likely to be with us for at least a year – maybe longer, depending on progress towards a vaccine.
This article discusses how you may plan an exit strategy from furloughing and other measures taken to date - including reducing headcount by implementing redundancies and forcing through adverse changes to terms and conditions. The legal penalties for getting it wrong are significant: protective awards of up to 90 days’ full pay, unfair dismissal claims, and claims for uncapped damages for discrimination. We also have further content below on this topic.
In conjunction with our international colleagues, we have produced a useful guide on restructuring for international employers and have further information on our international page.
We have an experienced team available to provide comprehensive legal and HR support in the UK, Ireland and Hong Kong, as well as internationally through our alliance with Ius Laboris. In addition to our team of specialist employment lawyers, we can leverage our team of HR consultants to support meetings and assist trade union and worker representative body negotiations. To find out how we can support you with redundancy and restrucuting matters, please visit our service page.
Please do get in touch if you would like any support on managing the impact of Covid-19 on your workforce.
Restructuring the workplace post Covid-19 - FAQs for employers31 July 2020
The Coronavirus Job Retention Scheme may have been extended to 31 October 2020, but employers are thinking now about what their workforce might look like following the end of subsidised furlough and a return to more normal working patterns.
How is Covid-19 affecting Employment Tribunals?20 July 2020
Covid-19 has created a significant backlog problem in the Employment Tribunal. Employers are increasingly likely to see claims relating to furlough and/or a safe return to work, and many hearings will be dealt with remotely.
Reducing business costs - alternatives to redundancy28 May 2020
When businesses run into financial difficulties and need to reduce costs, the knee-jerk reaction is often to consider the scope for job cuts.
Insolvency and TUPE21 May 2020
This Inbrief aims to guide you through the law on transfers of undertakings (TUPE) in the context of an insolvency, summarising the main employment considerations.
I’m still standing - should employers set up a standing body for collective consultation?06 May 2020
Many businesses will be facing difficult decisions over the coming weeks and months, including potential redundancies. This article discusses whether now might be an opportune time for employers with no recognised trade union to set up a standing body for collective consultation purposes.
Redundancy05 May 2020
This Inbrief looks at how employers can minimise the risk of legal claims when dismissing employees by reason of redundancy.
Collective redundancies05 May 2020
Most employers are aware of the procedures that have to be followed when making someone redundant (or their job, to be more precise).
Furlough – planning an exit strategy23 April 2020
The government’s Coronavirus Job Retention Scheme is currently due to end on 30 June 2020 (having been extended from 31 May). It has provided employers with some important breathing space and there is no question it has saved jobs. But as the end of the scheme draws closer, it is important for employers to start considering their furlough exit plans.