The case of a company boss firing his staff by Zoom has put the focus on employee rights, says KAREN HARVIE
Pressures arising from the pandemic may have led many firms to make decisions they may not have made in more normal circumstances, particularly in the management of employees, and one recent case has brought this issue into sharp focus.
The boss of US mortgage broker Better.com called 900 hundred of his staff onto a Zoom call to tell them they were fired. His exact words:”If you’re on this call you are part of an unlucky group that is being laid off. Your employment is terminated. Effective immediately.”
Wow, you might say. Wow indeed.
I think most would agree that this is not the way to conduct business and the firm’s clients may be thinking: if this is the way it treats its employees, how will it treat its customers? He later acknowledged the error of his ways and apologised for failing to show “respect and appreciation”.
There may also be a view that it could never happen here? Well, unfortunately, it can. And it does.
One of the reasons given for the mass redundancies was that the company had over-hired during the pandemic – and hired the wrong people.
It wouldn’t be unreasonable to think that, given the unprecedented nature of the situation, there will be firms in Scotland who might also have done similar or taken employment related decisions they might not normally have taken.
Whatever your situation as an employer, and regardless of the unique circumstances of the pandemic, the key point is that all employment laws need to be strictly adhered to.
So could this situation arise here? Redundancies involving 20 or more dismissals within 90 days trigger statutory consultation obligations requiring employers to collectively consult with trade unions or worker representatives. There is also a duty to notify BEIS before implementing any proposed dismissals in connection with a programme of collective redundancies.
There are also requirements to fairly select, consult on a one to one basis and to actively look for alternative roles in the company to avoid unfair dismissal.
It should be said that only employees with two or more years’ service qualify for the right not to be unfairly dismissed in a redundancy situation.
So what happens if, as a business owner or manager, you find yourself in the position where redundancies are likely?
The first and most important point is that employment is a complex area of law and ignorance is no defence.
Should you fail to comply with your collective consultation duties then an employment tribunal may make a protective award. The essence of this is to make the employer liable to pay a sum of money to all affected employees in order to punish the employer for its failure to meet its statutory obligations.
‘Damage is not just financial. Just consider the reputational impact’
The extent of the punishment is to be proportionate to the degree of fault on the employer’s part, subject to a maximum award of 90 days’ pay for each employee. The starting point in cases of a total failure to consult is that a tribunal will award the full 90-day sum. In the US case, just try multiplying up by 900!
Failure to give notice to BEIS could also lead to a criminal conviction and fine, not only for the company, but potentially also for its directors and managers.
Furthermore, a finding of unfair dismissal can result in an award of damages up to the lesser of £89k, or a year’s pay.
But the damage is not just financial. Just consider the reputational impact. In the case of Better.com just how many people will want to join the firm in the future? As we’ve already mentioned, its action could well have damaged its brand considerably in the eyes of its clients.
It’s important to remember, employees are not just resources – look after them, especially when circumstances are difficult. Treat them as you would want to be treated yourself.
Karen Harvie is a senior associate in employment law at Aberdein Considine