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Covid-19 Business Survival – Lesson No 7 – Redundancy

Updated: Jul 31

Millions of UK employees could be put at risk of redundancy over the coming months as the Coronavirus Job Retention Scheme (Furlough) gets wound down, starting as early as August, and ends in November when the government contributions…...stop! It is a hard edge. We are all about to start some very difficult times.


Businesses will have to work out how to, or if they can, survive following months of low or zero income – they will have to consider their projected future revenues and profits against overall costs and expenses and then, most likely, consider cost reduction planning which will inevitably include redundancies.


And, we expect large scale redundancies; the most prevalent reason will be for workforce reduction, but also as many businesses and workplaces close.


Redundancy is obviously a difficult time for both employer and employee, on business but also on lives. So, while it is never going to be a good situation, making sure the redundancy is dealt with correctly, with empathy, kindness and common sense helps everyone.


Employers need to ensure that they follow the correct procedures and apply them fairly. Employees have a number of rights in a redundancy situation and both parties need to understand what these are.


Employees who are made redundant may be entitled to a statutory redundancy payment if they have been employed for two years or more and, depending on the circumstances, they may be able to challenge the termination of their employment as an unfair dismissal.


7 Lessons Employers will need to know:

  1. What “redundancy” means (i.e. business closure, workplace closure, and reduction of workforce), and how to identify a suitable pool of people to select from.

  2. When they must inform those at risk and consult collectively about redundancy.

  3. How to deal fairly with individuals being considered for redundancy (including using fair selection criteria to decide who from the pool will be made redundant) so as to minimise claims for unfair dismissal.

  4. Employees cannot be made redundant in certain circumstances, such as while pregnant, on grounds of race, sex, sexual orientation, whistleblowing or numerous other reasons.

  5. What the alternatives to redundancy are, including lay off and short-time working.

  6. What notice period to give, and the application of payment in lieu of notice.

  7. How to determine an employee’s entitlement to a statutory or contractual redundancy payment.


Aria Grace Law has been involved in numerous redundancy matters, from individuals to large scale programs. Our experience has truly helped move both employers and employees forward in an expeditious and caring way. We are often told that we have a totally different, warm approach – maybe because we care about what we do, maybe because we plant a tree after every signed settlement agreement – whatever it is, we’ll keep doing it.


In the meantime, if you want to have a confidential discussion, please do get in touch with us by contacting us at employment-law@aria-grace.com.


Employment Update by Lindsay Healy - Founding Partner at Aria Grace Law 29.07.2020

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