With the Coronavirus lockdown now heading into its eighth week, all employers are taking a hard look at how they can best approach business continuity. We expect that many businesses will need to make some hard decisions over the size and structure of their workforce. Over the coming few months, employers may have to consider redundancies. Many are questioning whether they can retain current staff numbers when the lockdown ends, and the unexpected and commonly undesired question comes to mind as to whether they can legally reduce the headcount. If this is a path you need to take to ensure your business can continue, regardless of the current environment brought on by coronavirus, you need to comply with your employees’ contracts and also follow a fair redundancy procedure. Dismissing employees, whether it is for redundancy or for any other reason, is regulated by employment law. Failure to comply may result in an Employment Tribunal claim being brought against you. Below we answer three common dismissal-related questions employers are asking during the coronavirus outbreak.
Can I dismiss an employee immediately if they have not completed two years’ employment?
Nearly all employees have a right to a notice period so it is unlikely that any employee can be dismissed immediately. Employers need to give employees either their contractual notice or, in some cases, their statutory notice period if this is longer than the notice period in their contract. In addition, employees who have two years’ or more continuous employment with their employer or an associated one have a right to a fair dismissal. While employees who have not completed two years’ service have less protection, this does not mean a claim cannot be brought against you. There are some reasons for dismissal that allow an employee with less than two years’ service to bring an unfair dismissal claim, including dismissals:
- for blowing the whistle;
- for a health and safety reason;
- because of participation in trade union activity;
- for reasons connected with pregnancy, childbirth, or statutory maternity, paternity, adoption, parental leave, shared parental leave or time off for dependants.
In addition, all employees have protection against discrimination if, for example, the employee was dismissed because of one of the nine protected characteristics under the Equality Act 2010. These include protection because of race, nationality, gender, sexual orientation and disability.
Do I have to follow redundancy procedures?
Redundancy can be a fair dismissal provided a fair procedure is followed. Redundancy is legally defined and is where the dismissal is “wholly or mainly attributable” to the following:
- a business closure;
- the employee’s place of work is to close; or
- a reduced requirement of the employer for employees to carry out work of a particular kind or to do so at the place where the employee was employed.
Even if the reason for dismissal is redundancy, an employer must also follow a fair process in relation to the redundancy. This includes identifying an appropriate pool of employees from which to select for redundancy, carrying out a fair and objective selection process, consulting with employees (including looking at ways to avoid the employee’s redundancy) and considering whether there is any suitable alternative employment for the employee. In addition, if an employer proposes to make 20 or more redundancies at one establishment within a 90-day period, there will also be obligations to consult collectively with trade union or employee representatives.
Can I lay off staff temporarily?
After the furlough scheme ends, you may be in a position where you cannot immediately provide work for all your employees. Rather than make redundancies, you may want to consider laying some employees off temporarily or reducing their hours. If there is no provision in the employee’s employment contract regarding lay-off and short- term working, the action can only be taken if:
- there is an implied right to lay-off employees or put them on short-term working but there is a strict test and is only likely in those industries where there is a custom and practice of lay-offs and short-time working; or
- you get the agreement of the employees to make a change to the terms and conditions of employment. This will usually involve consultation with the employees and possibly collective consultation depending on the number of employees involved and the likelihood that they will agree to the changes. If you and the employee reach an agreement to make changes, ensure it is documented in writing.
We are currently living in extraordinary times. However, when it comes to dismissing employees, the usual rules still apply. To protect your interests, it is always best to seek legal advice before making a dismissal. That way, you can protect yourself from an Employment Tribunal claim. For further business legal advice, please enter an enquiry