by Alan Hickey, Peninsula Ireland
Few businesses will avoid having to make redundancies at some point during their lifetime. But during the COVID-19 pandemic, they are sadly becoming more common as business owners are forced to let more employees go to cope with lower demand and the winding down of the Government supports like the Temporary Wage Subsidy Scheme.
A redundancy situation can exist where a business, or part of it, is shut down completely or shut down in a particular location. It may also be an option if a business needs fewer employees with particular skills (i.e. a reduction in the size of the team or a re-structure), or if work is to be done in a different manner and the existing employee is not sufficiently qualified or trained to perform that work.
Redundancy is a technical area of employment law that exposes employers to various risks that could lead to costly discrimination and unfair dismissal claims. It is vital therefore that businesses have a thorough understanding of the procedures involved.
Various steps will need to be considered in any redundancy exercise. These are:
- Careful initial planning and identification of the rationale for redundancy.
- Considering if there are alternatives to redundancies.
- Notification to the Minister of Employment Affairs and Social Protection if a collective redundancy situation exists.
- Statutory duties to consult and inform appropriate representatives of affected employees.
- Identifying the criteria to be used for selection along with the selection process.
- Individual consultation is recommended in most cases.
- Ending the contract of employment through the proper use of notice or payment in lieu of notice.
- Calculation of statutory redundancy and any ex-gratia payments that will be due to any employees who are made redundant.
- Offering a right of appeal to anyone who is selected for redundancy.
With social distancing requirements still in place, some companies who are considering redundancies are exploring the option of consulting with employees virtually. Although this is an untested area, there appears to be nothing in the redundancy legislation that would prevent redundancy consultations taking place by video link. However, using video consultations should not distract employers from being careful to ensure that employees are fully appraised of the situation and properly consulted as part of a remote redundancy process.
Holding consultancy meetings is crucial to ensure the fairness of the redundancy process isn’t later called into question by an employee who loses their job as part of a restructure. The fundamental guidance for employers is to ensure that any virtual consultation process complies with the principles of fair procedures to minimise the risk of a subsequent unfair dismissal claim.
There are three different methods of online communications that employers may be inclined to explore – email, telephone, or video link.
The last option, using a video link, according to reports, is the best method of the three. Although it can be daunting to conduct a redundancy process this way, it is still the most personable of the remote options and can help to reduce the anxiety that may build up during the process for both parties.
Face-to-face consultations will likely always be the go-to approach where possible; however, in the meantime, it is safe to assume that virtual redundancies might become more commonplace for the foreseeable future. Some employers may still be able to hold face-to-face consultations, as long as the proper social distancing measures are observed, and the environment where the consultation meetings are taking place complies with public health guidelines.
The bottom line is that the pandemic has created a lot of grey areas, affecting our day to day lives as well as employers’ businesses. Still, grey areas will not excuse employers if they contravene laws on redundancy. To reiterate, a proper redundancy procedure should always be followed regardless of the current coronavirus situation – or whether the employee is on a period of lay off, annual leave, or family leave, etc.
Finally, as part of an effective redundancy procedure, employers should always explore alternative options to redundancy and allow employees to contribute suggestions, for example:
- Introducing a freeze on recruitment.
- Reducing overtime.
- Reducing the use of temporary workers being hired.
- Re-training employees into other areas (redeployment).
- Reducing sub-contracting.
- Temporary lay-offs or short-time working (more information can be found on our employment law pages).
- Changing terms and conditions to reflect a wage freeze, wage cut, reduction in bonus or pension contributions.