Employers need to be fully prepared for employees challenging decisions affecting their employment, writes SALLY-ANNE ANDERSON
Act in haste, repent at leisure. Never has this old saying been more important for the business community as we begin to see much of the government’s Covid support begin to taper off, including the much-vaunted furlough scheme. Without doubt, it has been absolutely critical for the country, providing much-needed financial help to both individuals and businesses during this crisis and ultimately leaving us in a far better economic situation than we otherwise might have found ourselves.
But the government cannot provide this financial backing indefinitely and from July the scheme began to reduce in scale. The original scheme paid 80% of the wages of people who couldn’t work, up £2,500 per month. In July, employers were required to pay 10% of salaries. In August and September the government’s contribution is reducing further and will pay 60%, with employers paying 20%.
Much of the business environment has changed for many firms, across all sectors and these firms are now looking to begin a process of recovery.
In this context it is no surprise to find many businesses looking to cut costs, the most expensive of which tends to be people. In short, we are already seeing firms beginning to make redundancies, and as we head towards the complete end of furlough, this is likely to continue.
The key questions for all businesses are probably twofold: Do I need to do this and, importantly, am I following the correct procedures in doing so?
The answer to the first question is fairly subjective. The answer to the second is most definitely not.
Whilst most large companies will have in-house legal and HR teams, the majority of Scotland’s businesses are smaller and many will not have these specialised resources in-house.
With business owners focusing on a range of issues it would not be unusual for correct employment procedures to be misconstrued or to fall through the gaps, the consequences of which can come back to haunt businesses for some time.
In the last few months we have seen around a 60% rise in contentious queries and our own research in November last year revealed early signs of this. Ministry of Justice figures showed that more than 800 single tribunal claims were lodged in Scotland between April and June in 2020, up 21% on the same period the year before.
Increasingly, it seems, employees are seeking to challenge business decisions affecting their employment and if there is a surge in job losses following the end of the furlough support that may continue.
There’s no doubt employment law is complex, but there’s also no doubt that the laws and regulations are there for a very good reason – for the protection of both employees and employers.
The question of whether a business considers redundancies is of course very much for the business owners to assess, and will be based principally on whether there has been a workplace or site closure or there is a reduced requirement for employees to carry out work of a particular kind.
However, it is vital that the proper employment procedures are followed before any final decision is made regarding potential redundancies. This will include consideration of all and any alternatives to redundancy, meaningful consultation with employees at risk of redundancy and genuine attempts to identify alternatives roles for those at risk of redundancy.
A failure to apply the law correctly could result in employment tribunal claims against your business which could have a seriously detrimental impact on the business both reputationally and financially, and the fact that you may be a small business without the necessary in-house expertise will not be a strong defence.
Once you start the process, as a manager or business owner, you are not just responsible for taking appropriate care of employees, but also managing the process in accordance with the law.
Situations involving redundancy are never pleasant for anyone, but as an employer you can ensure that the staff who are leaving you are treated fairly, and that you protect the business going forward.
Taking the right advice now means you can look ahead to better days with comfort and confidence.
Sally-Anne Anderson is head of employment law at Aberdein Considine