T-minus 45 days
Will the end of the furlough scheme mean the start of collective consultation for some?
According to official government figures, at the Furlough scheme's (Coronavirus Job Retention Scheme) peak in May, 30% of the UK workforce was furloughed, reducing to 11% by mid-August. The government has further introduced the Job Retention Bonus, which kicks in from November and is designed to support companies and firms returning their staff back to work, rewarding them for keeping workers in their jobs, essentially supporting the wages of staff brought back to work from furlough leave.
Although the Coronavirus Job Retention Scheme (CJRS) may be argued to have been successful to some extent, the Covid-19 pandemic has forced many companies to re-think their current structures and plan for significant reductions in their workforce and inevitably make redundancies in order to survive. The CJRS guidance for employers states employees' redundancy rights continue to apply as normal while they are furloughed. This means companies thinking on embarking on the redundancy procedure, will still need to comply with the statutory framework for making redundancies.
There is a statutory requirement for an employer to collectively consult with appropriate representatives of affected employees where it is proposing to dismiss as redundant 20 or more employees at a single establishment within a period of 90 days or less. Such consultation must begin "in good time" and no later than 30 days (where between 20 and 99 redundancies are proposed) or 45 days (where more than 100 redundancies are proposed) before the first dismissal takes effect (Section 188 TULRCA 1992).
This means yesterday, Wednesday 16th September, marked 45 days to the end of the furlough scheme (31 October 2020) and therefore triggered collective consultation for companies that are proposing to make 100 or more workers redundant. Union leaders have openly written to the prime minister, warning that "floodgates" could open for millions of workers to lose their jobs.
Despite the negative press, for employers that have been severely impacted by the Covid-19 pandemic and in some cases with unlikely recovery in sight post pandemic, there is a clear advantage of initiating collective consultation while employees remain on furlough. This means the business can initiate the collective consultation period of 30 or 45 days, referred to above, taking advantage of the CJRS, during which dismissals cannot take effect.
Employers without existing trade union representatives or a standing body of employee representatives are required to ask affected employees to elect employee representatives for the purposes of conducting the collective redundancy consultation. Although the number of representatives is up to the employer, companies need to ensure the elected representatives represent the interest of all affected employees. With regard to current circumstances, the collective consultation is likely to take effect remotely, therefore more representatives may be required to ensure an effective communication can take place between representatives and affected employees.
TULRCA places various obligations on employers in relation to collective consultation. Given the current climate, employers should be careful about initiating any large-scale redundancies and give consideration to careful planning. Any negative press could further enhance the financial impacts on companies that have faced challenges during the pandemic. If you are an employer and require advice on redundancies or an employee and have been placed at the risk of redundancy, our dedicated team of employment lawyers can provide you with appropriate advice in moving forward.
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.