The government’s Coronavirus Job Retentionsion Grant also known as the Furlough Scheme has been a welcome gift to both employees and employers across the UK. It has meant that businesses have been able to keep staff in jobs which will help some businesses to recover to full health.
Businesses will need to start thinking about how they rebuild the business in an economic landscape which has changed rapidly over the last 4 months. The goal will be to protect the business so that it can be restored and save some jobs. We will take a look at some options that you may want need to consider:
- Reduced Hours also known as Short Time Working
In an ideal world business would bounce back in an instance and everyone would return to work on full hours and full pay. If a full quota of staff is not an option for the business you may consider reducing the hours of some or all staff members.
In order to reduce staff hours you must have the contractual right to do so. This would be stated in the Employment, Worker contract or in another document. If you do not have a contract you will need to negotiate with staff and create a new agreement or agree to amend the existing agreement. This must be done in writing and staff should be made aware of their right to claim redundancy if the reduced hours continue for a period of time. Staff will want assurances that if they are made redundant in the future will be based on their original pay and hours.
Do ensure that you are not acting in a discriminatory way if you are reducing the hours of some staff.
Always seek advice before reducing hours.
- Lay-off with no or limited pay
Some contracts allow an employer to place an employee on standby without pay. A lot of furlough agreements also sneakily added this right into the contract. With this option staff receive no pay other than guarantee payments of £29 per day for 5 days within a 3 month period. Staff also have the right to request redundancy after a period of time and it is important that the correct procedure is followed. Failure to do this correctly can be very costly to a business.
- Redundancy
Redundancy is where a role has significantly reduced or disappeared. It is about the role and not the person and so employers must think about placing all those who do a particular role at risk.
Staff should not be discriminated against and the correct monies should be paid.
It is worth noting that there is no redundancy pay for staff who have less than 2 years service. They will still be entitled to notice pay and other outstanding payments such as unused holiday.
For businesses who will be making 20 or more redundancies within a 90 day period. There is a strict procedure which must be followed so employers really need to think ahead. One of the things they need to think about is timing as the process will be a minimum of 30 days for business making between 20 and 99 staff members redundant. For business making over 100 redundancies within a 90 day period there must be a consultation period of at least 45 days.
There will be instances where putting a settlement agreement in place is the best way of protecting the business.
- Restructure
This is similar to a redundancy. This may be where the role still exists but you may decide that it can be done differently or absorbed into another role. In this instance staff should be consulted and just like any other dismissal they will be entitled to notice pay.
If you would like advice or support with any of the options above or for guidance with any Employment Law or HR matter please feel free to contact us at [email protected]
If you have found this blog useful please share it with someone else.