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COVID- 19 and Redundancy: Faith in the Economy or just obscured statistics?

3rd August 2021

This month the Government has announced that the “Planned Rate of Redundancies” as at the end of June 2021 is at its lowest since 2015 and suggesting that only 15,661 roles were currently at risk.   To put this into context, there were over 150,000 roles at risk in the same period last year, and around 20,000 roles being at risk in the same period the year before.

On face value, that appears to be a very impressive statistic given that the UK remains affected by the COVID-19 Crisis, despite steps being taken from 19th July to ease restrictions in England following the so called “Freedom Day”.

Upon closer inspection however, it becomes apparent that this data comes from the receipt of HR1 forms by the Secretary of State, for which there is a mandatory requirement to submit where it is intended that there will be 20 or more employees made redundant at any one establishment within 90 days.

When considering that data, it should be noted that:

  • the notification requirements are that 30 days notice must be given where there are 20-99 employees affected, and 45 days notice must be given where 100 or more employees are affected;
  • It is unlikely to be any coincidence that this happens at the start of the summer holiday season and dealing with these issues may well be pushed back until the end of such time;
  • There is no notification due where fewer than 20 employees are affected at one establishment, i.e. one location. It follows that:
    • the largest victims of the Covid-19 pandemic are likely to be the small to mid-sized employers and who will fall outside of this remit, and who would never be caught or seen by these statistics; and
    • Larger organisations with multiple sites where there are fewer than 20 redundancies per site, but larger numbers overall, will not necessarily be caught within the data which we are now being invited to consider.
  • It sits against the background that COVID-19 measures remain in place and providing protection to the UK and its economy including:
    • Furlough supported by the CJRS – support under the latter will continue until at least September 2021, and whilst it will now require some contribution from employers, that is not in many cases insurmountable;
    • Business rates relief having only just ended, but there is significant relief remaining in force for many;
    • Restrictions on winding up petitions and forfeiture of commercial property remains in place.
  • The last 15 months have been far from plain sailing for many, and:
    • to a degree some of those organisations that may otherwise now be reporting the need to make redundancies have had that accelerated by the pandemic, and so have already taken those steps. As such the statistics represent only a snapshot of a circa 6 week period, and ignore the wider effect.
    • For some it may already be too late, with the damage having been done, notwithstanding that they are seeking to make the most of the current easing of restrictions. It remains to be seen whether they will be able to do enough now to recoup their losses and continue in the longer term.

Having considered the above, whilst these statistics provide a glimmer of hope, it may not yet be the sign of a recovery to come.

For many the next few months are likely to be critical and some difficult decisions are likely going to have to be made.  In the event that you are considering making redundancies and need support in ensuring that you have a full and robust process, that you are able to comply with relevant obligations, and wish to seek to avoid tribunal claims wherever possible, we are on hand to help.

If your business is considering redundancies and you would like to discuss this position and/or the use of Settlement Agreements in such circumstances, then please get in touch with Jason Alcock, who works with businesses to resolve a wide variety of employment law issues.  You can contact Jason on 01543 267456 or email him at jalcock@ansonssolicitors.com

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