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3 Alternatives to Making Redundancies during Coronavirus

The Government’s coronavirus job retention scheme (CJRS) has helped many employers keep their staff. But, the winding down of the CJRS and the grim economic forecast mean that employers may need a more flexible workforce and for many sectors, redundancies seem inevitable.

Alternatives to making redundancies

Although the increased flexibility in the CJRS from July will be welcomed by many, employers looking for greater flexibility to deal with reduced or unpredictable workflow, may wish to look at one of the following alternatives to redundancy:

1. Laying off or short-time working

Laying off staff involves sending employees home without pay for a limited period.  Short-time working means employees work less and receive less than half their usual weekly pay but may be entitled to the guarantee payment of up to £30 per day.

Both measures need an express contractual term, which should be used with care to avoid constructive unfair dismissal claims. We can advise you on introducing these terms and when layoff or short-time working trigger the right to a statutory redundancy payment.

2. Changes to pay, hours or duties

Other options available to employers include:

  • reducing pay;
  • reducing days or hours, including moving on to zero hours contracts; or
  • reorganising duties, for instance to move employees to areas of your business with more work.

Unless your employment contracts give you the right to do so or you are able to reach a binding agreement with your recognised trade union, you need each employee’s consent to make these changes. Although employees may accept these more readily in the current climate, if they do not agree the changes may have to be pushed through by dismissing and offering to re-engage the employee on new terms. We can guide you through this process. We can also advise you on the risk that some changes could create an entitlement to a redundancy payment.

3. Changing to self-employed

Another option is offering work on a freelance, self-employed basis. This may seem attractive, but you would need to make the employees redundant first. There are a number of risks, including the impact on the fairness of the redundancy dismissals and the possibility of being caught by the IR35 tax rules. We can help you weigh up the pros and cons.

If you need help and advice on this topic, please do not hesitate to contact us on 0113 350 4030 or at hello@scesolicitors.co.uk.

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SCE Solicitors is a boutique employment law and litigation practice based in Leeds which advises clients nationwide. Please note that the information in this blog is to provide information of general interest in a summary manner and should not be construed as individual legal advice. Readers should consult with SCE Solicitors or other professional counsel before acting on the information contained here.

Samira Cakali

Samira Cakali is a pragmatic and approachable solicitor advocate with extensive contentious and non-contentious experience in the fields of employment law as well as civil litigation, within a range of commercial businesses from SME’s to multinationals as well as senior executives.

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