All information in the below article is correct as at the date of publish (25 March 2020).  However due to the ongoing nature of the Coronavirus outbreak, the information below may be liable to change at any time.  

Following the Coronvirus outbreak, redundancies are expected to increase as businesses struggle to cope with the economic impact, either because they are unable to continue trading during lockdown, have seen a downturn in trade as a result of the pandemic or the overall impact on the economy.  The economic impact is likely to last well beyond the eradication or control of the virus.  However, whilst it might reasonably be expected that businesses can, and will, make redundancies, there is likely to be some particular considerations which should be addressed by the business before any decision is made.  Any employee who has been placed at risk of redundancy might consider raising these matters with their employer to ensure that all options have been explored before a decision is made.

What is a redundancy?

To start with the basics, what is a redundancy?  The statutory definition of redundancy identifies three sets of circumstances in which a redundancy will arise:

1. Business closure (closure of the business altogether).

2. Workplace closure (closure of one of several sites, or relocation to a new site).

3. Diminished requirements of the business for employees to do work of a particular kind.

A redundancy may be very obvious: if your employer’s business is closing as a whole or the workplace/branch you are working at is closing, your role is redundant.  However, there is usually more scope of discussion when considering ‘diminished requirements of the business’.

Diminished requirements can mean a number of different things but most commonly (particularly in an economic downturn) it will mean a reduced amount of work requiring fewer employees to carry out that work.

What if I don’t agree my role is redundant?

Whether there is a redundancy is generally at the discretion of the employer, and the Tribunals are usually reluctant to impose their own view in place of the employers.  However there will be circumstances where you can show a redundancy does not exist e.g. if you can show that your work still needs to be done and is simply being given to another employee who has replaced you.  In those circumstances, any dismissal is likely to be unfair.

What procedure needs to be followed?

There is no prescribed redundancy procedure under UK law, but the employer must always follow a fair procedure when making a dismissal for any reason (exceptions may apply for employees with less than two years’ service).  However your employer is expected to undertake a reasonable consultation with you.  What that consultation will look like will depend on the circumstances – where the whole business is closing with little notice to the employer, it may be very short. In most circumstances, you will have at least two meetings at which the situation will be discussed with you and you will have an opportunity to discuss and explore alternatives to redundancy including alternative roles.

What special considerations might there be in light of the Coronavirus outbreak?

The Coronavirus outbreak has been completely unprecedented.  Employment law has not been set up to deal with a pandemic on this scale, and the Government are responding to each new challenge as it presents itself.  This means that consequences have not been tested in the courts and we would stress that what is set out below is our view of what may be taken into consideration when dealing with challenging redundancies.

Employers will not be able to override existing employment rights.  The Government have been clear on this throughout, taking for example the right to furlough employees (a new right granted in the wake of Covid-19) is not an absolute right to send staff home without prior agreement or a contractual right.  This means that your right not to be unfairly dismissed is not overridden and, for example, the extreme nature of the situation does not give your employer an implied right to make redundancies with satisfying the statutory definition or to fail to follow a fair procedure.

The procedure might look slightly different.  Having said that employers have to follow a procedure, there might be an argument that given how quickly the situation seems to change (on an almost daily basis) your employer might not have much notice of a business closure and might therefore follow a shortened procedure.

Alternatives might look slightly different too.  Normally, there are relatively few alternatives to redundancy – either another job within the same company or an offer to work shorter hours or at a lower pay to assist the business’s finances.  However given the Government’s extensive packages of business support measures available and the lengths they are going to to protect UK jobs, perhaps the biggest change would be a suggestion that a redundancy would only be a reasonable step to take where the employer has consider all possible alternatives to assist their financial position, such as furloughing their employees or taking a small business grant or Coronavirus Business Interruption Loan.  As we say this suggestion has not been tested in the employment tribunals but if you are being informed that your job is at risk, it is worthwhile making sure that all possible alternatives have been explored.

Overall it seems to us that Coronavirus-related redundancies will be treated slightly differently to redundancies for other reasons.  On the one hand, the tribunal is likely to have substantial sympathy for businesses who have simply been unable to weather the storm.  On the other hand, based on the enormous Government effort to protect jobs, the tribunals will likely be looking very closely at the reasons for redundant and ensuring that employers have abided by employment rights, and that they had no other reasonable options when making their decision.

Should you have any queries about the issues raised in this article, or on any employment related matter, please contact our expert Arvin Sandhu by email or on 01494 893 542.