Redundancy Consultation During Furlough – How Do I Handle It?

For May 2020, we have asked the employment team at Tughans to provide practical answers to unusual, sensitive or complex work-related queries. We call this feature “How do I handle it?”

The articles are aimed at HR professionals and other managers who may need to deal from time to time with the less common place disputes at work; issues that may, if handled incorrectly, lead to claims of discrimination or constructive dismissal or some other serious difficulty. 

The Company furloughed most of our staff across a number of sites. Whilst we were delighted to hear that the current JRS has been extended until July 2020, the lack of information about the mechanics of the JRS until October, without definite timescale for businesses reopening in Northern Ireland, is causing us great concern. We do not believe the business will survive until October. Can I now start a redundancy consultation exercise even though staff are currently furloughed?

It is assumed that you have already established that you have a valid ground for redundancy and that unfortunately, the business will close, or you can identify a clear reduction in work to be undertaken by employees. If there is a genuine risk of redundancy, the Company could commence consultation whilst staff are furloughed.

You have not said however, how many staff are at risk of redundancy, how many at each site and whether the Company operates in a unionised environment. In any case, the current pandemic, and furloughed staff, will not automatically absolve the Company of the requirements to consult about the possibility of redundancy.

You may be aware that the Company will have collective consultation obligations if you are proposing to make redundant at least 20 employees at one establishment within 90 days. This will greatly impact the timing of your consultation exercise and you should seek advice on the question of whether the Company’s sites each constitute an establishment.

The current pandemic, furloughed staff, or employees working from home, will not dilute these collective consultation obligations. In fact, you will appreciate that “absent” employees or remote working will make effective consultation more difficult to achieve. You may also be aware that with collective consultation, your primary obligation is to consult with representatives of the affected employees. Therefore, if you have union recognition, you should consult with the Union representatives. In the absence of a union, you may consult with existing employee representatives, or in their absence, you should offer affected employees the right to elect employee representatives with whom you can then undertake the consultation exercise.

It is anticipated you will already have existing channels of communication with all staff, working remotely or furloughed, and of course these could be used to inform staff of the potential redundancy situation, and, if required, facilitate voting arrangements/a ballot to elect representatives. There is little doubt that this will take some time and organisation and clearly you should build this time into your overall plan in the redundancy consultation exercise.

Whilst you may be able to suggest that it was not reasonably practicable for you to undertake a full collective consultation exercise in the current climate, the availability of a special circumstances defence will not completely release the Company from its obligation to consult, even with Coronavirus. Rather, you must at least do what is reasonable in your particular circumstances and be able to document the steps you actually have taken to consult with the affected employees’ representatives.

If collective consultation obligations are not triggered, you must still consult with those employees at risk of redundancy, and as above, clearly document what measures the Company has taken in this regard.

There will be additional data security issues arising and you should be conscious of the requirements and obligations under GDPR, checking with your IT department to ensure secure communications, and the protection of employees’ data. In all cases, communication could be by email, telephone, virtual meetings etc. with representatives or employees working remotely or those who have been placed on furlough.

You should be able to demonstrate the Company’s communication and engagement; robust and fair application of selection pools and objective selection criteria (agreed if possible): it’s unlikely that “absence on furlough” will be considered a fair criterion.  It is a matter for the Company which criteria you use to select those at risk of redundancy. The more objective the criteria, the easier it will be for you to justify fair selection for redundancy. Where possible, 2 staff members should be responsible for the selection process, to minimise accusations of bias or discrimination. All documents used in the selection process must be retained, together with the scoring matrix.  

You should offer, and record, the employees’ right to be accompanied; availability of alternative employment; termination of employment on the grounds of redundancy and an independent appeal process, always considering any Redundancy Policy you may already have. Whilst a Tribunal may have some sympathy with the Company, and the difficulties encountered in a remote exercise, such difficulties will not automatically persuade a Tribunal to avoid a finding of unfair selection, unfair dismissal, discriminatory practices or a failure to properly consult. Remember that to avoid an automatically unfair dismissal, you must follow the 3-step dismissal process.

Remember too, that all internal documentation will usually be discoverable in the event that there are Tribunal claims. If you need to rely on special circumstances to justify the Company’s lack of collective consultation; or explain shortfalls in communication or meetings with employees, documenting what steps you have taken, your consideration of alternative measures and your explanation why they were not possible in the Company’s circumstances, will all help.