Businesses need to ensure they consider all possible alternatives to redundancy when planning their recovery from the COVID-19 pandemic.
That’s the message from Harrison Drury’s associate solicitor and employment law specialist Kate Shawcross.
Kate believes some businesses could run the risk of unfair dismissal claims and employment tribunals as they look to restructure and reorganise following the crisis.
“Nobody wants to see people out of work and redundancy should always be viewed as the last resort,” says Kate. “The government’s financial support during this pandemic, such as the furlough scheme, has been successful in enabling many businesses to keep staff on the payroll.
“However, many companies are now having to plan for the longer term and may be looking at restructuring to cope with the economic slowdown.
Considering the alternatives
“There are still ways to avoid redundancy, and we would certainly recommend restructuring responsibly and considering alternative options wherever possible, perhaps looking at flexible working arrangements, or salary cuts, as well as reducing overheads by capitalising on employees working from home.
“Nevertheless, companies may conclude that redundancies are essential to protect the business and other jobs – even if the process can be delayed, or numbers of those affected reduced, some redundancies may still be inevitable. It is therefore imperative that businesses are prepared, and plan appropriately, to minimise the risks involved.
“The cost of a single tribunal claim can often reach upwards of £15,000, which puts further jobs at risk, so businesses need to take a responsible approach and follow the correct procedures.”
Protecting jobs and the business
Kate is also urging businesses to check their insurance cover before embarking on any redundancy and company reorganisation programmes.
She added: “With the right employer protection cover in place, businesses can reduce their financial exposure to employment claims brought against them. However, it’s vital businesses check the limitations of that cover before they start any restructuring or redundancy process.”
Harrison Drury has its own employer protection scheme, HR Compass, which offers an all-inclusive fixed-fee employment law service, to cover against employment tribunal and legal fees arising from claims. It also enables companies to spread legal cost of legal work.
The service is also backed by an insurance policy to offer protection from costs of defending employment tribunal claims.
More information on alternatives redundancy is available in our blog post on getting restructuring and redundancy right.