The Covid-19 pandemic has seen redundancy related calls to the Acas workplace helpline increase by over 160% during the course of June and July 2020 when compared to the same period in 2019.
Acas Chief Executive, Susan Clews, said:
“At the moment, nearly a third of calls to our helpline are redundancy related. The economic impact of coronavirus, alongside fears around the furlough scheme tapering off, has left many employers and their staff concerned about their future livelihoods….”
In response to this, Acas has issued updated guidance for employers on how to manage staff redundancies, which can be accessed here. The guidance covers the following:
- Making a redundancy plan
- Avoiding compulsory redundancies
- Redundancy consultations
- Selecting employees for redundancy
- Giving employees notice of redundancy
- Working out redundancy pay
- Supporting staff and planning for the future
In particular, the guidance focuses on possible alternatives to compulsory redundancy, such as offering voluntary redundancy or early retirement, asking staff to consider flexible ways of working and a reduction in working hours, as well as implementing a recruitment freeze and restricting overtime.
The guidance also clarifies that, since 31 July 2020, furloughed employees are entitled to redundancy pay based on their ‘normal’ salary, rather than the rate they have received whilst on furlough leave (provided they meet the relevant eligibility criteria for a statutory redundancy payment).
Acas were keen to emphasise that redundancies “should always be used be a last resort”.
The pandemic has already had a significant impact upon businesses around the country, and that effect is expected to continue well into 2021, if not longer. We recommend seeking advice at an early stage when embarking on a redundancy or restructuring process. There may be alternatives to compulsory redundancies, there may not, but we are able to guide you through this and share our experiences in what is new territory for many businesses.