With offices in Birmingham and Northampton, we offer expert employment advice to businesses and individuals across a range of sectors. If you are facing the prospect of making employees redundant during furlough, we can offer advice and guidance in handling this correctly.
As the end of the furlough scheme approaches, employers may have to make difficult decisions. While the government’s assistance has helped businesses to keep staff on their books over the course of the year, some employees will inevitably be made redundant as organisations have to face the fact there is no reasonable prospect of continuing their employment and that, in any event, they will ultimately face redundancy after furlough has ended.
The furlough and redundancy situation is more complicated than a straightforward redundancy and it is important to ensure that the correct processes are followed.
Is redundancy during furlough legal?
If a business does not have enough work for its employees, then being made redundant on furlough is allowed. However, extra care must be taken in selecting which employees to let go, to ensure you do not end up facing a claim for unfair dismissal.
The redundancy procedure: Consultation, Selection Criteria and Alternatives to Redundancy
In a redundancy while on furlough, employees’ redundancy rights remain the same as at any other time. This means that you must ensure that you have a fair process in place for choosing who will be made redundant.
The requirement for consultation could be harder to comply with while employees are away from their place of work. Consultation can be done remotely, including when collective consultation is required where 20 or more workers are at risk of redundancy.
As part of the process, you are required to consider possible alternatives to redundancy. The furlough scheme is such an alternative.
You may have to justify at some future date why you made someone redundant instead of keeping them on under the furlough scheme.
To select who will be made redundant you should start by putting together a pool of candidates to include those whose jobs are no longer needed as well as those who are in similar roles. It is important to ensure that this is not unfair in any way, for example, by including only those on furlough, as this is likely to select those with health or childcare issues above others.
You will then need to apply a selection criteria to decide which employees will be made redundant.
For more information about how to carry this out fairly, see our article Selection criteria for redundancy.
Redundancy notice during furlough should be given in the ordinary way, with a minimum of one week’s notice for employees who have been employed for up to two years and for those who have been there for over two years, one week’s notice for each year worked up to a maximum of 12 weeks.
How to calculate redundancy pay
Furlough redundancy pay must be based on a worker’s normal wages and not their reduced level of furlough pay. Statutory redundancy pay is calculated on the basis of years of service, age and weekly pay rate, as follows:
- Half a week’s pay for each year worked while under the age of 22
- One week’s pay for each full year worked between 22 and 41 years of age
- One and a half week’s pay for each full year worked while aged 41 or more
It is payable to workers who have worked for a business for two years or more.
Statutory notice pay must also be paid by employers as well as any other benefits to which the employee is entitled.
Contact us
If you are facing the prospect of employee redundancy and furlough, we can offer advice about the correct procedure and help you ensure that you do not inadvertently dismiss someone unfairly. The situation is particularly complicated at present and it is advisable to talk through your options with a legal expert before taking action.
If you would like to discuss potential redundancies with an experienced employment lawyer, email us at info@witansolicitors.co.uk or fill in our contact form.
