Employers need to think about collective redundancies now, law firm warns

If the government does not decide to extend the Coronavirus Job Retention Scheme (CJRS) beyond June 30, many employers may not be able to afford currently furloughed staff and businesses may need to start the process of making redundancies.

Tania Goodman, partner and head of employment law at Collyer Bristow, said: “Employers making 100 people or more redundant, in one establishment, will need to collectively consult with their staff through elected representatives and individually for those at risk for a minimum of 45 days, with those making between 20 and 99 people redundant collectively consulting for a minimum of 30 days.

“This means that in the former, consultations will need to start no later than May 15 and in the latter by June 1 in order for the consultation periods to have run their course by June 30, after which redundancies can be confirmed if necessary.”

The law firm warned that failure to collectively consult comes with stiff penalties, with each member of staff made redundant being able to claim a “protective award” of up to 90 days actual pay.

Goodman added: “Collective redundancy consultations can and should start sooner than the minimum prescribed consultation periods where possible, although when to start them is likely to depend on the anticipated needs of the particular business going forward.”

Employers have a duty to notify the Department for Business Innovation & Skills (BIS) if they are proposing collective consultation redundancies and this notification (Form HR1) must be given to the secretary of state for BIS before notices of termination are issued. The form must also be given at least 30 or 45 days before the first dismissal takes place, depending on the numbers involved. Failure to do so is a criminal offence and likely to result in a significant fine.