Employment law – 5 tips for October Redundancy focus

Anne Mannix
15 October 2020

This month we are focusing on some redundancy issues that have come up with particular reference to furlough but also to throw some light on a couple of procedural questions:

1. What is the relationship between Furlough and Redundancy?

An employer’s decision to furlough employees means they cannot maintain enough work for the employee due to the pandemic. The Coronavirus Job Retention Scheme (ending 31 October) attempts to help stabilise the business until it can recover, but in many cases this isn’t possible. For employees, furlough isn’t necessarily a way of protecting their jobs because the reality is there isn’t enough work for them to do; furlough also involves a 20% drop in pay (more if the employee would normally earn over £2,500 per month). Employees are rightly concerned since furlough means there isn’t enough work for them, which is a legitimate reason for a redundancy dismissal.

2. The new Job Support Scheme (JSS), starting from 1st November

https://www.gov.uk/government/publications/job-support-scheme is only intended to support “viable jobs”. The JSS will subsidise the wages of employees working at least one third of their normal contracted hours – for the unworked hours their pay will be split one third covered by the government, one third by the employer and the remaining third unpaid.

3. Temporary immigration permission -What are the risks in a redundancy situation?

Tier 2 sponsored migrants

  • Tier 2 migrants (and any dependant(s)) will be ineligible to remain in the UK and their visa(s) likely to be curtailed by Home Office, unless they are able to obtain sponsorship from a new UK employer or make an application under a different immigration category
  • A sponsor will need to make a report on its Sponsor Management system (SMS) stating the migrant’s employment has been terminated and this must be done within 10 working days of the termination date
  • Once a Tier 2 migrant leaves the UK, they will be caught by the cooling off period (unless an exemption applies). This will mean they will not be able to re-enter the UK for up to 12 months as a Tier 2 migrant.

In the UK as a partner of a British citizen

  • For a migrant with a temporary loss of income between 1 March 2020 and 1 January 2021 due to COVID-19, this loss of income will be disregarded provided the minimum income requirement was met for at least six months immediately prior to the date the income was lost.
  • Migrants with an upcoming visa expiry date may be able to rely on the temporary Home Office COVID -19 policy concession and evidence income for at least six months up to March 2020
  • Where migrants have been furloughed, the Home Office will take into account the income as though the migrant was earning 100% of their salary
  • Migrants who have been made redundant by the time an extension application needs to be made will need to explore other ways of meeting the financial requirement, eg, savings, rental property income etc
  • The migrant may not be eligible to make an extension application and may need to apply under the 10 year family route or different immigration category. Switching into a different immigration category could also potentially restart the time spent in the UK towards obtaining Indefinite Leave to Remain (ILR).
4. If an employee is furloughed, does that mean the employer can make them redundant?

The employer will still need to select fairly employees for redundancy and follow a fair process. involving consultation with employees.

5. Does an employee have a right to appeal against a decision to make them redundant or be accompanied to a redundancy consultation meeting?

The joint ACAS/CBI/TUC joint statement on handling redundancies (24 September 2020; https://www.acas.org.uk/joint-statement-acas-cbi-tuc ) says:

“Losing your job has a human as a well as a business cost. The way you let people go says a lot about your organisation’s values. Think about how you will handle the conversation – whether it’s face-to-face or remote. And remember, you may want to rehire the same person in the future”.

So whilst there is no strict legal requirement to provide an appeal process, some redundancy selection procedures contain this right; failure to allow an employee to appeal against their selection for redundancy will not render a redundancy dismissal in itself unfair, but it can be taken into account, especially if it is in breach of an agreement. The ACAS advisory booklet, Redundancy Handling, also recommends an appeals procedure.

Employees have no strict legal right to a companion in a redundancy consultation meeting, (as is legally required in disciplinary and grievance cases. But do you want to be that legalistic? What about the tongue tied employee?. Or the employee who has a disability? There is a requirement to have a fair procedure and the entirely non-legally binding advice on the ACAS website (https://www.acas.org.uk/manage-staff-redundancies/select-employees-for-redundancy recommends offering an appeal process and a companion.

More detail on Redundancy practice may be found in our employment partner Dr John McMullen’ new book: Redundancy Law and Practice, 4th Edition, Oxford University Press to be published in January 2021: https://www.wildy.com/isbn/9780198798484/redundancy-law-and-practice-4th-ed-hardback-oxford-university-press

Anne Mannix
Partner - Employment
Anne Mannix is a Partner Solicitor at Spencer West. She specialises in employment law, partnership law, business protection and the employment aspects of corporate deals, restructuring and redundancy.