At a time of uncertainty, you will want to do everything within your means to keep your business running smoothly and to limit risk. As we continue to respond to Covid-19, managing the employment relationship is even more critical to ensure your business can survive and thrive. The biggest cost to any employer is its people and people are essential to a business’s success. Careful and sensitive management of ending as well as maintaining the employment relationship whilst balancing the needs of the business will therefore be key.
The Employment Relationship
Managing the employment relationship can be challenging any time but it is even more so now and sadly, Covid-19 is leading to many difficult conversations and decisions having to be taken.
For many employers, redundancy will unfortunately be inevitable, but even where it can be avoided, for many businesses, the pandemic is forcing them to review its operating structure and restructure itself in order to be able to continue in the ‘new normal’.
There are then decisions needing to be made as to who you bring back off furlough, and who you don’t; and for those returning, you may face protest and have to deal with employees refusing to return. All of which adds to the already existing pressure that exists for many businesses.
Consequently, organisations face many risks associated to managing the employment relationship and whilst this hot topic focuses on where risks can exist with Covid-19, the principles will apply to the employment relationship at any time.
What Claims Can be Pursued?
Employment tribunal claims arise through poor management; most often with dismissals, it is the process that leads to a successful unfair dismissal claim rather than the decision to dismiss itself. There are several ways in which an employee can pursue a claim through the employment tribunal system:
There is a statutory right not to be unfairly dismissed under the Employment Rights Act 1996. The right is generally subject to several qualifying conditions such as the employee must have been dismissed and at the time of the dismissal, they had two years’ service.
There are exceptions where the 2-year qualifying service is not needed. Those in particular which could be relevant now include:
1. Dismissals in connection for raising health and safety issues
2. Refusing to work in circumstances of danger
3. Being or proposing to become an employee representative.
This is similar to unfair dismissal in that there is a qualifying service required in order to bring a claim; however it is the employee that resigns because of the actions of the employer, and it this resignation that would be seen as a dismissal as opposed to the employer carrying out the dismissal.
The Equality Act 2010 protects employees who hold a protected characteristic from discrimination in the workplace. A protected characteristic includes age, sex, disability, sexual orientation, religion or belief, pregnancy and maternity leave, marriage and civil partnership, race (including colour, nationality, ethnic or national origin) and gender reassignment.
The protection covers employees from being directly discriminated against and treated less favourably to someone else for their protected characteristic. Or where rules or practices are put in place which then disadvantages an employee. It also makes it unlawful to harass or victimise an employee when that treatment is connected to their protected characteristic.
Employees are protected under the Employment Rights Act who make protected disclosures, also known as whistleblowing claims. They are protected from dismissal, selection for redundancy or from being made subject to a detriment.
Unfortunately, redundancy for many will be inevitable at this time. Manging the end of the relationship correctly in line with employment legislation is going to be critical to avoid claims of unfair dismissal, or discrimination.
What is a fair dismissal?
To be able to successfully defend an unfair dismissal, there are two hurdles an employer must get over. The first being that the reason for the dismissal was for one of the recognised fair reasons. So, this could be either conduct, capability, redundancy, statutory restriction (by continuing to employ you would break the law) or some other substantial reason (SOSR, such as employee sent to prison).
The second hurdle, and perhaps the most difficult to defend is whether the dismissal was reasonable. Consideration would be given to whether a proper procedure was followed and if so, was the decision to dismiss within a band of reasonable responses. Only if it were beyond what a reasonable employer would have done, can a tribunal conclude that a dismissal was unfair.
Each dismissal is going to have its own set of circumstances. What is reasonable for one employer, may not be reasonable for another. Reasonableness is not defined in law; it is only for a tribunal to conclude what is.
With redundancy, it is very rare for a tribunal to involve itself in assessing whether the business case for the redundancy was correct and appropriate, however a good solid business can have a significant impact on how employees react to the news as if they can understand and appreciate the reasons they are more likely to support the business. It can also help in defending any case at tribunal in demonstrating the redundancy was a reasonable response to the situation it was in. In the absence of a good business case employees may not be convinced of the genuine reasons for redundancies being considered and are much likely to challenge the process at all stages. They focus on the process that is undertaken in response to the business circumstances.
How to mitigate against risk from an unfair redundancy dismissal?
Here are just some of the ways in which an employer can mitigate the risk from an unfair dismissal claim when handling redundancy dismissals. It would be impossible have one definitive list since each case is going to have its own set of circumstances. The items here are very much process related, however, where you will also need to be reasonable is around the questions and discussions that arise from the consultation process and not just what your response is, but how you reach that response.
1. Always follow your own redundancy policy; if you do not have one, consider how you have handled redundancies previously especially in terms of pay
2. Establish the business case.
3. Write to those affected explaining the business rationale, the anticipated numbers, the pool being drawn (where there has to be a reduction in numbers), the proposed selection criteria, the process you intend to follow along with the timetable
4. Ensure you comply with the statutory consultation timescales
5. Where you have less than 20 roles at risk of redundancy there is no set timescale, but you are legally obliged to carry out “meaningful consultation”. To demonstrate you have “meaningfully consulted”:
a) Have you allowed the employees to contribute and put forward ideas to avoid redundancy and have you given this due consideration?
b) Have you allowed sufficient time for employees to be able to contribute and have a say on their own personal circumstances before you close consultation and decide?
c) Have you given serious consideration to finding suitable alternative employment and find ways to avoid redundancy?
6. Through consultation, explore whether you can seek volunteers
7. Consider whether there are ways of avoiding redundancies
8. Consider alternative employment (including suitable alternative, which is a role of comparable terms)
9. There is an obligation on employers to offer suitable alternative employment to a woman whose job becomes redundant whilst she is on maternity leave. The priority for those on maternity leave is the one area of discrimination law where employees receive additional legal protection
10. Ensure there is a fair selection process free from discrimination
11. The decision on who is redundant must only be made once consultation has closed
12. Allow redundant employees reasonable time off to seek new employment
13. Explain how notice pay, redundancy pay, and any other payments will be calculated
14. Keep a paper trail of your search for looking for alternative employment
15. All meetings should be followed up and confirmed to employees in writing
16. Where you do have disgruntled employees and there is a risk of a claim; incorporate an appeal process into your procedure (where there is not one set out in your policy), as this gives the employer time and opportunity to address any issues internally rather than waiting for a tribunal claim.
Remember the hurdle you must get over is to demonstrate the dismissal was reasonable by the way the procedure was conducted and that the decision to dismiss was within a band of reasonable responses.
Whether you are managing a conduct process or any other process that has potential for dismissal, always adhere to your own company policy and always explore through the process ways in which alternative ways to avoid a dismissal, or in the case of conduct; would action short of dismissal be reasonable. Dismissal should always be the last course of action.
For HR guidance on how to mitigate against risks that may arise within the scenarios listed below, read the full article at www.hrsolutions-uk.com/protecting-your-business:
• Managing Furlough
• Returning to a Covid Safe Workplace
• Providing a Safe Place of Work.
Further HR Guidance
• Webinar Recording: you can watch the recent webinar recording on demand at https://www.hrsolutions-uk.com/services/protecting-your-business-2/
• HR Knowledge Base: this online portal is the go-to resource for thousands of business owners and managers across the UK. The HR Knowledge Base includes HR documents, templates, legal updates, news and hot topic articles as well as access to free webinars and HR seminars. To find out more call 0844 324 5840 or visit https://www.hrsolutions-uk.com/hr-knowledge-base/