A recent People Management and CIPD survey revealed that a quarter of UK employers expect to make permanent redundancies in response to the coronavirus crisis. At the same time, more than half are predicted to furlough staff members.
Government help is on its way, however, it might not be coming soon enough for some employers. While most employers are looking to cut staff costs to survive the coronavirus pandemic, it goes without saying that, where possible, redundancies at this time should be a final resort and not a first option. So before making redundancies, there are other options you should consider. You can also get in touch with us today to find out more and discuss your business.
The new Coronavirus Job Retention Scheme announced by the government will cover employees who might have otherwise been made redundant or laid off.
This new scheme will allow businesses to retain their staff while recovering 80 per cent of wage costs up to a value of £2,500 per employee per month. It is up to you whether you can afford to make up the remaining 20 per cent to pay to your employees.
If you are unable to operate or simply do not have enough work because of COVID-19, you can ask your employees if they will agree to go on furlough. If, after being asked, any of your employees refuse to go on furlough, you might have to consider redundancy. However, you must ensure this follows the correct redundancy procedures.
Remember - To designate any of your employees as ‘furloughed workers’ requires their consent.
There is no limit to the number of employees that can be furloughed. Under current guidelines, an employee can be furloughed for a minimum of three weeks, and a maximum of four months. However, this will be reviewed and is subject to change.
Find out more about what the Coronavirus Job Retention Scheme means for employers in our article here.
While under normal circumstances, staff would generally be resistant to any potential pay cuts or reductions in benefits they receive, in the current coronavirus climate you might find they are open to this. Where the alternative could involve job losses or business closures, employees will tend to be more inclined to discuss pay reductions.
Remember - There might be obligations to consult with unions and or employee representatives if such a change is proposed for more than 20 employees. If you are considering making pay cuts, you should always ensure you are paying at least the National Living Wage (or National Minimum Wage for staff aged under 25) and any changes made should be in writing.
In the first instance, before considering pay cuts, there may be other ways to reduce overall remuneration, such as stopping overtime. While it might be standard practice in your organisation for staff to work overtime, a ban on this could be one of the first steps in money-saving. You could also consider reviewing staff bonus arrangements to see if these can be changed.
These alterations can be very complicated; therefore, it is important to obtain legal advice before making such changes to employment contracts. Get in touch with us today for help and guidance from our Employment Lawyers.
In the current crisis, it is not uncommon that we hear about employers looking for volunteers within the workforce to take unpaid leave. This is another way to stop or reduce the amount of work temporarily. It is a short-term measure and could be used rather than making job cuts right away.
The problem is there isn’t much law governing unpaid leave in the UK. Your employees right to unpaid leave will usually be outlined in their employment contract. But often, it is at the employer’s discretion as to whether leave is granted.
A career break or ‘sabbatical leave’ is longer term and will be a more complicated arrangement and likely to require more documentation.
Remember – The options of both unpaid leave and career breaks require employees’ consent.
In the UK, employers can require their employees to take holidays, and dictate when these holidays should be taken. This is provided employees are given adequate notice. Adequate notice will usually be defined as twice as long as the amount of time you want your employee to take off. If the notice period is less, then employee consent will be required, and you must get this in writing.
While forcing staff to take holidays isn’t necessarily going to save you money in the short team, it means that you will have your full workforce ready to go when business picks up again, without the interruption of staff holidays.
This guide does not constitute legal advice and is provided for general information purposes only. If you require specific legal advice you should contact one of our lawyers who can advise you based on your own circumstances.
Please note this information is accurate as of 28 April 2020 and is subject to change as official guidance is adapted to reflect the implications of the virus.