Handling Redundancies Effectively

Employment tribunal claims have been on a steady incline, with data showing a 64 % rise in claims since the employment tribunal fees were abolished in July 2017.

Recent figures reveal the number of employment tribunal claims has significantly increased. This is a result of job losses and employment changes due to Covid19 lockdown measures. As such, we’re experiencing the highest number of employment Tribunal claims since 2012/2013.  The Ministry of Justice reported an 18% rise of employment tribunals claims involving individuals from April – June 2020, compared to the same period last year.

A second lockdown adds further pressure to business and could cause more job losses. It is therefore expected that there will be an ever-increasing number of employment Tribunal claims.


 Rise in Redundancies

Following the first lockdown earlier this year, ACAS reported a sharp increase in calls relating to redundancy queries. 33,169 calls were made during this time, up from 12,313 in the same period of 2019. Website visits also saw a surge in redundancy related searches from 11,000 usually, to 430,000 during that period.

Almost half a million redundancies were planned within the first Lockdown in March through to August, with an astonishing 58,000 planned redundancies in August alone.

Incentives such as “Eat Out to Help Out” were initiated to support businesses in the hospitality sectors. However, the second lockdown is expected to create further turmoil. This is turn will lead to further job losses.

The challenging uncertainty of Covid19, the lockdowns, furlough, and redundancies are weighing heavily on businesses of all sizes. This has been evidenced by recent announcements that large businesses such as Sainsburys, John Lewis and Lloyds Banking Group losing approximately 10,000 job between them.


How Can You Safeguard Your Business From Employment Tribunals If You Need To Make Redundancies?

  • Understand The Correct Procedures

YouGov, recently surveyed over 2000 business representatives. They found that 24% per cent of UK companies were not fully aware of the legal responsibilities around the process of redundancies. This was the same for 33% of SME’s.

Procedural errors can be incredibly costly to businesses and are avoidable with the right professional HR support.

  • Don’t Use Redundancy To Cover Up Employment Breaches

Redundancy can appear to be a cheap and swift route for someone who is underperforming. Perhaps the employee is not the right “fit” for the company or isn’t getting along well within the team. However, redundancy should not be used as an excuse to remove the employee from the company.

Businesses must be mindful they may be at risk of a tribunal if redundancy is used for any such instance unless there is a genuine need for making staff redundant.

  • Ensuring Employees Are Not Discriminated Against

Choosing to make a person redundant based on their status (age, race, sex etc) could lead to a discrimination tribunal.

Discriminating staff based on any of the 9 protected characteristics is unethical practice. In turn, it can be incredibly costly to you and the business.


Future Proofing

Employment tribunal claims could still be set to soar following the most recent government guidelines. Some businesses feel they may not recover from a second lockdown, meaning more employee job losses are on the horizon.

Employees who are thought to be “sitting tight” during furlough may soon raise claims of unfair redundancy, unlawful changes in contract Terms and Conditions, and other contractual issues including pay and benefits as businesses move into the new year.

Given the significant number of redundancies expected over the coming months, it is strongly advised employers work closely with HR to ensure any redundancies or contractual changes are carried out correctly and in the most compassionate way possible.


HR with Stellamar

Here at Stellamar, we have a plethora of knowledge. We strive to take the stress out of dealing with people orientated situations by partnering with your business to provide credible and commercial advice and help. No job is too large or too small for us.

We have worked closely and supported our clients throughout this incredibly tough time. The arrival of lockdown and the consequential changes to businesses required us to support a variety of our clients through redundancy procedures, affecting over 200 employees.

Our team has recently grown. Therefore, as has our capacity to help support additional businesses with a variety of HR functions. Please contact us if you would like advice on any area of HR or people management, including redundancy and contractual changes.


Next Read: ‘Redundancy: Your Questions Answered

Author: Hannah Savill, HR Consultant