Is Furlough a Route to Redundancy?

The purpose of the Government’s Job Retention Scheme was to ensure that employers retain and continue to pay staff during the lockdown, but as the impact of COVID continues to bite, are redundancies inevitable?

Is Furlough a Route to Redundancy?

Is Furlough just postponing the inevitable?

Since April staff have been entitled to benefit from a paid period of leave, with the Government paying up to 80% of their salary, up to a maximum amount of £2,500 per month. 

For the 9.6 million employees who have benefitted from the furlough scheme, this has been a financial life line. No one wants to have to  worry about their job security at a time when people are already concerned for their health. 

The Chancellor, Rishi Sunak, announced at an emergency budget in July that employers who take back to work any employee who has been furloughed will benefit from a bonus of £1,000 per employee. 

It does seem that as the furlough scheme winds down there is a real possibility that for some employees who have been furloughed could be on route to redundancy. 

As the furlough scheme starts to wind down, employers are now having to consider the fact that as of August they will have to pay National Insurance and pension contributions for furloughed staff. For businesses who have remained closed and been unable to trade this is a financial burden which could lead them to consider how they can afford to go forward.  

As of next month the benefits under the Job Retention Scheme will continue to reduce and wind down to 60% eventually. Employers will now face the prospect of paying a top up payment of 10% in September and 20% in October to make up employees’ wages to 80%. 

For many businesses, especially small businesses, who have not been able to trade during lockdown, retaining staff simply might not be an option. 

In these situations furlough, could possibly, be a route to redundancy. It really all does depend on factors such as the nature of the employer’s business, how the business has been impacted by lockdown and how the business anticipates it is likely to recover after lockdown. 

What is redundancy?

Redundancy is defined as circumstances where the termination of employment is attributable to the fact that the employer has ceased, or intends to cease to carry on business for the purpose of which the employee was employed. 

Essentially where a business no longer requires work of a particular kind, or has ceased or expects to cease or diminish a particular type of work redundancy might also apply. 

Any redundancy has to be genuine and an opportunistic employer cannot simply use the winding down of furlough as a way to get rid of staff. 

In order to be able to justify a redundancy dismissal the employer does need to show that there was a genuine downturn in work that the employee was employed to do and as a result of this it is not possible for that employee to continue to be employed. 

Although there are businesses where there will have been a downturn in work, wholly attributable to the lockdown, an employer who simply uses the ending of furlough to make staff redundant could be exposed to the prospect of an unfair dismissal claim. 

While the Job Retention Scheme remains in place any employer choosing to make staff redundant really does need to be able to justify their decision. An employment tribunal would take a dim view of any employer who make redundancies as a knee jerk reaction.  

Redundancy is a form of dismissal and if the employer doesn’t go through the correct process before deciding to make staff redundant, they could be exposed to the risk of an unfair dismissal claim or a discrimination claim.

The time limits for making a claim are short and any claim connected with redundancy must be brought in the Employment Tribunal within 3 months, minus a day, of the date on the event that you are complaining of. 

Contact Us Today

If you find yourself in a situation where you have been advised by your employer that they want to bring the employment relationship to an end due to redundancy, the team at Employment Law Services (ELS) can help you. Call us now for a free consultation 0800 612 4772.

Workplace Redundancies – What Every Employer Should Know

The coronavirus pandemic has had a severe impact on the economy and it is inevitable that redundancies will be on the rise, but getting this wrong could prove costly for Employers.

Workplace Redundancies – What Every Employer Should Know

The Legal Definition of redundancy

Redundancy is defined as circumstances where the termination of employment is attributable to the fact that the employer has ceased, or intends to cease, to carry out business for the purposes of which the employee was employed. 

If a business no longer requires work of a particular kind, then employees whose role it is to carry out that particular work could reasonably be dismissed by way of redundancy. 

Where work of a particular kind had ceased, or is expected to cease or diminish then this can also lead to redundancy. 


An employer with more than 20 staff at risk of redundancy in one workplace has a legal obligation to consult with staff at least 30 days before any staff are dismissed. 

Consultation and notice are completely separate. Consultation should cover the reasons for the proposals to make redundancies, identification of the job groups at risk and the number of staff who are likely to be covered by the proposals. 

The employer should also identify the selection criteria being used to score the staff who are at risk. Timescales for the procedure and proposed termination dates should also be put to staff. Where there are 99 staff or more in one workplace consultation should begin at least 45 days before the proposed date of any dismissal, however the employer can chose to consult over a longer period should they wish to do so. 

The consultation specifically should consider ways to avoid the redundancy, ways to minimise the number of staff being made redundant and ways to mitigate the impact of the dismissal. 

It may seem strange, from an employer’s perspective, that there is a legal obligation to look at ways of avoiding the dismissals as part of the consultation process. However, in reality, staff on ground level can sometimes suggest better working practices which allow the number of staff being dismissed to be minimised. 

Staff can mitigate the impact of the dismissal by using the consultation period to apply for another job. 

As well as collective consultations, which take place through trade union representatives and workplace representatives, staff should also be offered individual consultations. 

Failure to consult properly can leave the employer exposed to the risk of a protective award claim. Any employee who is made redundant without proper consultation can claim a protective award of up to 13 weeks’ pay, if 20 or more staff were made redundant in the same workplace. 

How should an employer deal with redundancy?

There are certain steps that an employer must take before they decide to make anyone redundant. 

They then need to identify a suitable pool for selection. The employer can identify the pool by identifying which jobs groups it needs to consider cutting head count in.  

Depending on the nature of the business, it can be as easy as identifying a particular group of worker. However, the employer must carefully consider whether other staff who do not technically fall within the same job group should be included in the pool. 

For example, interchangeable roles, or roles in different parts of the business which are broadly similar. 

A selection criteria should be used to look at various elements of an employee’s work history and performance. The selection criteria should be reasonable and objective. It can include elements such as disciplinary record, skills and qualifications, time keeping, absence levels and suitability to carry out future work demands for the employer.  

The scoring should be used objectively, and not just as a tick box exercise. 

It is important that the scoring is applied in a way that does not discriminate against the individual being scored. For example, time spent on maternity leave should not be recorded as an absence which brings the scoring down. Similarly, any absence which is related to a disability should not be included. 

The employer should be mindful of using scoring criteria which might cause indirect discrimination. For example, using length of service as a scoring criteria might be discriminating against younger members of staff are are likely to have shorter service. As such, an approach of last in, first out should can leave an employer exposed to the risk of a discrimination claim. 

Notice Periods

Notice periods are sometimes set out in an individual’s contract of employment. However, in the absence of this statutory notice periods would apply. These are as follows:

  • 1 month – 2 years’ service – 1 weeks’ notice
  • 2 years’ service or more – 1 weeks’ notice for each year of service, capped at a maximum of 12 weeks. 

Notice is separate from consultation and the employer must have started the consultation process before they can serve notice. The employee should either be allowed to work up until the end of their notice period or should be paid in lieu of notice. 

Redundancy Pay

Statutory redundancy pay has to be paid to all employees who made are redundant after been employed for 2 years or more. Staff who have less than 2 years’ service are not entitled to a statutory redundancy payment. 

Statutory redundancy pay should be paid based on an employee’s individual weekly pay rate and is capped at a maximum of £538 per week. The weekly entitlement amount for each full year of service are as follows: 

  • 0.5 weeks’ pay for each year of service, for staff aged 22 and under
  • 1 weeks’ pay for each year of service, for staff aged 22-41 
  • 1.5 weks’ pay for each year of service, for staff aged 41 and over

Statutory redundancy pay is capped at 20 years’ service. 

An individual’s contract of employer might give them the right to an enhanced redundancy payment, which is more generous than the statutory amount. If this is the case, the employer must make the redundancy payment based on the contractual amount. 

Other payments 

Employees being dismissed by way of redundancy are entitled to any accrued but untaken holiday pay which is due at their termination date. 

They are also entitled to receive their normal salary up until their termination date. 

Employees who do not receive all of the payments that they are entitled to can pursue a claim for unlawful deduction of wages in the Employment Tribunal. 

Is redundancy always fair?

Redundancy is a form of dismissal and if it isn’t considered correctly it can give rise to a claim for unfair dismissal or a discrimination claim. 

Employment Tribunals are generally of the view that scoring criteria must be objective and can’t be scoring should not be reached in a haphazard way. An employer really needs to be able to justify each score for the individual employee. 

Any scoring criteria which unfair or unreasonable in a way which is glaringly obvious will most likely be criticised by an Employment Tribunal. 

However, what the Employment Tribunal won’t do is make any kind of judgment on what the employee, or others who they compare themselves to, should have scored. It is not the role of the Tribunal to say that one employee should have been made redundant instead of another. 

Where an Employment Tribunal makes a finding of unfair dismissal or discrimination the employee is likely to be awarded compensation. 

Time Limits

The time limits for making a claim in the Employment Tribunal are 3 months, minus a day, from the date that you are made redundant, the date that you did not received a payment you were owed, or the date of any act of discrimination.

Support for Employers

The COVID-19 pandemic and associated furlough scheme continues to present numerous and complex challenges for Employers. 

If you are an Employer and require advice and support on extending full furlough, introducing flexible furlough, or are contemplating a restructure/reorganisation and/or redundancies as a result of the ongoing COVID 19 restrictions, call us now on 0800 612 4772 or Contact us via our website and we will set out clear options for you to help ensure you comply with your legal obligations.

Advice on Settlement Agreements

If you find yourself in a situation where you have been advised by your employer that they want to bring the employment relationship to an end and are issued with a Settlement Agreement and told that you have a set timescale in which to make a decision, the team at Employment Law Services (ELS) can help you.

Advice on Settlement Agreements

What is a settlement agreement? 

A settlement agreement is a mechanism which can lawfully be used to terminate an individual’s employment. A settlement agreement is essentially a contract which ends terminates an employee’s employment. Under the terms of the settlement agreement the employee will be offered a sum of money and will agree to give up certain rights in exchange for that sum of money. 

Why Are Settlement Agreements Offered?

Settlement agreements can be offered under various circumstances. Some employers will offer a settlement agreement as standard when making an employee redundant. Employees who are going through disciplinary proceedings or grievance procedure can be offered a settlement agreement. Sometimes circumstances, such as a clash of personalities or the breakdown of a working relationship are enough to terminate an individual’s employment by way of settlement agreement. 

The main reason for the employer to offer the settlement agreement is to cover themselves against the risk of an employee bring a claim against them, by essentially buying out the employees right to pursue a claim. 

While a settlement agreement can be offered in circumstances where the employer might be at risk of facing an employment tribunal claim, a settlement agreement can also be used simply to get rid of a problematic employee. 

What are Protected Discussions?

Settlement discussions should be conducted on the basis of a ‘without prejudice’ discussion, which is sometimes referred to as a protected discussion. At this discussion the employer does have to conduct themselves in a reasonable manner and cannot force or put pressure on the employee to take the settlement agreement. 

The employer should not conduct the discussion in a way which discriminates against the employee. Any discriminatory behaviour, or improper behaviour, can result lead to a claim against the employer. 

An employer should not assume that everything said at a protected discussion is “protected” in the sense that it won’t come back to bite them in the form of an employment tribunal claim. Any improper conduct or discrimination might lead to the employee deciding to resign and bring a claim for constructive dismissal. 

If the employer suggests during discussion that the employee is likely to be dismissed if they don’t accept the settlement and go ahead with any disciplinary, then there is a real possibility that the employee can show that their dismissal was predetermined. 

What’s In A Settlement Agreement?

The settlement agreement will normally have a list of all possible employment tribunal claims that an employee could bring. As well as that some employers might try to cover unrelated matters or future claims. An employee cannot reasonably be expected to sign away rights to future claims, for example a latent personal injury claim for an employee working with asbestos will potentially be a valuable claim for an illness that presents itself later in life. Similarly, a miscalculated pension which might become apparent once an employee cannot be covered by a settlement agreement. 

Appeals Courts have taken the view that the inclusion of wording such as “full and final settlement” and “settlement of all claims” is simply not the catch all approach that the drafting Lawyer would want it to be.

However, the average employee is unlikely to be able to afford an to bring an appeal in the Appeal Court and it is much better to get proper advice on any settlement agreement that you have been offered before signing. 

Fixed Fee Advice On Settlement Agreements

At Employment Law Services (ELS) our experts can offer fixed rate detailed advice on your settlement agreement. We can negotiate a settlement which protects your rights and ensures that you get the highest possible settlement. There are no set rules on what an employee should be paid under their settlement, however we can offer a free assessment and advice you on how much we think your settlement should be. 

Contact Us Today

If you have been offered a Settlement Agreement by your employer, call us on 0141 611 9785 or Book a Free Consultation now.

New Quarantine Restrictions on Entering the UK

Last week the Government warned against non essential travel to Spain and imposed a 14 day quarantine period on holiday makers returning to the UK. Yesterday Belgium, the Bahamas and Andorra were also added to the list. For many people this has meant cutting their existing holiday short or cancelling their holiday altogether.  

New Quarantine Restrictions on Entering the UK

Some of those returning home are now faced with the dilemma of telling their employer that they cannot return to work for the next two weeks. So, what happens to employees who find themselves in this situation? 

Those who are fortunate enough to have jobs which allow them to work from home should be able to do so. It is still the case that staff should be allowed to work from if they are able to do so.  

What is important is that employees returning from any of these countries do not attend their workplace. They face a criminal fine if they break the quarantine rule. It is important that employers do not force, or unduly pressure staff to break quarantine and return to work. Any employer who does that will be asking their employee to commit a criminal offence and also putting other staff, and customers of the business, at risk  

What Are The Options?

Where employees are not in a job that allows home working, the employer has a number of options open to them.  

The employer can choose to allow the employee simply to extend their period of annual leave by an addition 14 days. In reality this can only work if the employee has enough annual leave remaining to allow them to do that.  

However, the employer has to consider the impact that this might have on their business. Allowing an employee to be away from the workforce is likely to put a strain on other members of staff and could impact on other members of staff. It might be the case that other members of staff are due to go on holiday and their leave period could be impacted by the absence of the employee who has to quarantine. In a small business granting additional leave for a quarantine period is likely to impact on the business.  

An employment contract is one of performance, so if an employee cannot perform their job then strictly speaking they should not get paid. However, an employee who is forced to quarantine under Government imposed regulation should be given special consideration by the employer.  

If an employee cannot be offered additional paid leave to cover the quarantine period then the employer should seriously consider allowing a period of special leave. Most contracts of employment are unlikely to set out provision on special leave. However, it is within the discretion of every employer to allow special leave.  

In the unprecedented time that we find ourselves in it, all reasonable employers should consider special leave for employees who are forced to quarantine.  

It is up to the employer’s discretion as to whether a period of special leave should be paid. Special leave can be paid in full, based on the employee’s normal pay, paid on part or completely unpaid. Employers can chose to treat a quarantine period as a mixture of annual leave and special leave.  

While an employee who is on special unpaid leave might not be paid for the time that they have to quarantine, the important thing is that the leave is authorised by the employer.  

If an employer unreasonably refuses to grant a special period of authorised leave, then they are likely to face challenge from the employee or the employee’s trade union. Given that the reason for the quarantine is Government guidance the employee cannot be expected to break the quarantine because their employer has unreasonably refused their request.  

If an employer does refuse to allow authorised leave, then the employee is exposed to the risk of being disciplined for not attending work. The outcome of any disciplinary action could be dismissal. In particular, an employee who already has been disciplined due to unreasonable absence levels could be at risk of dismissal if their employer refuses to authorise their leave period. An employee in the circumstances with more than 2 years’ service would be entitled to pursue an unfair dismissal claim in the Employment Tribunal.  

An employee who is refused authorised leave, whether it be in the form of extended annual leave or special leave might be entitled to resign in response to the employer’s refusal and bring a claim for  constructive dismissal. An employee with two years’ service might be entitled to pursue a claim for constructive dismissal in the Employment Tribunal.  

For employees who are due to travel to any of these countries, it is important that they discuss any impending travel plans with the employer before they decide to go on their holiday. It is important that the employer is given a fair opportunity to decide whether they can accommodate the quarantine period.  

It might be reasonable for an employee and employer to reach agreement on whether the employee should travel. The employer cannot force the employee to cancel their holiday, however they can give withdraw the employee’s annual leave authorisation.  

Any authorised holidays can be withdrawn as long as the employer gives notice of the same length of time as the holiday would have been. An employer could cancel a seven day holiday by given notice seven days before the employee’s holiday is due to start.  

If an employee still insists on going on holiday after their holiday authorisation has been withdrawn then they will be treated as having an unauthorised absence. This is likely to lead to disciplinary action being taken and could lead to dismissal.  

Support for Employers

 If you are an employer and need advice regarding how to deal with staff who have to quarantine, call us now on 0800 612 4772 or Contact us via our website 

Support for Employees

Employees have three months, minus a day, from the date of any action by the employer to lodge a claim in the Employment Tribunal. If you would like a free consultation call us now on 0800 612 4772 or Book Now via our website .

Employment Law Services (ELS) builds upon its talented workforce with two new key appointments

We are delighted to announce two key appointments as part of our continued expansion strategy. 

Based at our Glasgow offices, Priya Cunningham and Naomi Scrimshire join our multi-award-winning Employment Law Team on 3 August 2020 and will help us to continue to exceed client expectations and deliver service excellence across a full range of employment law and HR matters. 

Priya is an accomplished litigator with over twelve years’ experience at both the Employment Tribunal and Appeal Courts, including acting as the lead agent in the landmark case of North – v – Dumfries & Galloway Council.

Naomi is a proficient HR and ER specialist with over six years operational experience providing advice and support to Directors and Senior managers across a range of contentious and non-contentious employment related matters to mitigate risk and protect businesses from costly employment tribunal claims.

Both will use their experience and expertise to advise clients on a full range of employment law and HR matters and add increased capacity and capability to our existing service offering to both employers and employees.

Employment Law Services (ELS) builds upon its talented workforce with two new key appointments