What about employees who say they cannot return to work due to childcare issues?

Following our webinars on all aspects of furlough and alternatives to redundancy, it is an unfortunate fact that a number of organisations are likely, sooner or later, to be forced to make some employees redundant.

Our employment experts Jamie Gamble and Roisin Patton take you through the key aspects of conducting cost reduction redundancies, but with a focus on aspects that make this exercise different this time. For instance:

• How are you going to conduct sensitive meetings remotely?
• How are you going to ensure that dismissing any furloughed staff will be fair? You may have furloughed at speed, but redundancy selection criteria cannot be defined by such factors.
• Will you use this time to review your selection criteria if you already have some in place?
• How will you deal with individuals who are shielding, have child care issues or are pregnant?
• How do you ensure this is all done sensitively and fairly for those roles that are being made redundant, but also for those who continue to work for you but are still isolated on furlough or working from home?
• And what are the risks for making redundancies in this “new normal”?

Although you may be perfectly familiar with redundancy exercises these are far from normal times and it is therefore worth pausing to think about the impact that Covid-19 might have and what else you need to think about or plan for.

The webinar was recorded on Thursday 2nd July.

The government introduced The Working Time (Coronavirus) (Amendment) Regulations 2020 to amend the Working Time Regulations 1998 to allow for the change.

Some examples of the key questions to ask include:

• Is there still a viable underlying business that is likely to continue beyond the current crisis?
• What does the revised short to medium cash flow look like and will the company continue to be able to pay its liabilities?
• Does the company have the support of all of its stakeholders – lenders, shareholders, customers, suppliers and banks – even though the business might be in breach of its own obligations?
• What measures could (and should) the board put in place to protect creditors, including making sure that exposure to creditors (both collectively and individually) is not increased, assets are not sold at less than value and no creditor is treated more favourably than another?
• Is there still a reasonable prospect of the business avoiding liquidation or administration?

The key question is always whether accepting the money is in the best interests of creditors as a whole bearing in mind that accepting Government support and continuing to trade might increase the company’s overall liabilities. Directors should be mindful that if the business fails, their decisions during this critical time may be scrutinised and it is therefore important that directors have up-to-date financial information and projections to form the basis of any decisions, take stock, get the right advice and document the decisions that are taken.

There are two stages:

• Stage 1 – The provision of written information to the representatives.
• Stage 2 – Consultation on the proposed redundancies “with a view to reaching agreement” about certain matters

Stage 1: Provision of information

The first stage in the collective consultation process is to provide the representatives with written information including details of the proposed redundancies (often called a section 188 letter). This information must be given to the appropriate representatives and the time limit before dismissals can take effect does not start to run until they have received it. It is this information which ‘starts the clock’.

It is possible that there will be changes to the proposals during the consultation process: indeed that is part of the reason for the process. The employer’s obligation is not just to provide the appropriate representatives with the relevant information at the start of the process. It is under a continuing obligation to provide them with information in writing about any developments during the consultation process (although later changes do not ‘restart the clock’ before dismissals can take effect).

Stage 2: Consultation on the proposed redundancies “with a view to reaching agreement” about certain matters

The consultation process must include consultation “with a view to reaching agreement with the appropriate representatives” on ways of:

• Avoiding the dismissals
• Reducing the number of employees to be dismissed
• Mitigating the consequences of the dismissals

The Government will allocate £360 million to charities providing key services and supporting vulnerable people during the crisis.  £200 million of this amount will be paid to Hospices UK to be distributed to hospices to help increase capacity and give stability to the sector.  The remaining amount is to be allocated to:

• St Johns Ambulance to support the NHS
• victims charities, including domestic abuse, to help with potential increase in demand for charities providing these services
• charities supporting vulnerable children, so they can continue delivering services on behalf of local authorities;
• disabled people
• Citizens Advice Bureau to increase the number of staff providing advice during this difficult time

The Government Departments will identify priority recipients, with the aim that these charities will receive money in the form of a cash grant over the next few weeks and by the end of April to assist in paying amongst other costs April’s wage bill.