Employment Law pitfalls and COVID-19

April 3rd, 2020

The Government announcement that essentially put the UK in lockdown shook many businesses.

The current Coronavirus pandemic is concerning for employers, some of whom have felt the need to act swiftly to safeguard their business. Many employers will look to make employees redundant or place them on furlough leave.

However, the faster these decisions are made the more this increases the risk of employers being exposed to unfair dismissal claims.

This is particularly so for smaller employers that may not have access to professional employment law or  HR advice, and those who act in haste, without any legal support, may find that they are opening their business up to costly consequences further down the line.

Redundancies because of COVID-19

If you’re looking to make an individual or team redundant, it is essential that a fair process is followed.

As an employer, you must give adequate consideration to who you are selecting for redundancy and why. Implementing fair selection criteria, applying it without bias, consulting openly with employees and considering alternative employment are all essential steps in the redundancy process.

Employers may be able to justify a shorter timeframe for the redundancy process, but it is vital that each step is still taken and it is unlikely that an Employment Tribunal would accept the Coronavirus pandemic as an excuse.

Changes to terms and condition of employment

If you are considering placing employees on Furlough leave or reducing an employee’s working hours or pay, you must have their consent. 

Trying to implement this without an employee’s consent may result in the affected employees terminating their employment and pursuing a claim against your business for constructive unfair dismissal.

That said, the current situation is seeing people pull together in many ways, and in our experience, many employees are willing to be flexible when it comes to pay and working hours. Communicating openly and honestly with employees at this time is of utmost importance, and may help promote a stronger, healthier working relationship in the future.  

Lay offs

You may have a ‘lay off’ clause in your standard employment contract, which will entitle you to lay off an employee without pay for an indefinite period.

If you do not have this clause in your employment contact, you do not have the contractual right to lay off an employee without pay. If you do this, it will give an employee the right to terminate their employment and bring a claim for constructive unfair dismissal.

Where an employer does  have a contractual right to lay off employees without pay may find they only need to  lay off a proportion of their workforce.  If so, the redundancy principles of selection and consultation will still apply and a fair selection needs to be made. Employers who act with haste and without any consideration to a fair process are likely to face claims for unfair dismissal.

Selection for Furlough leave

If you choose to Furlough selected members of staff, this can potentially  create grievances as among those chosen for furlough and those not selected.   In order to avoid claims for unfair dismissal, an employer should be able to justify why a particular employee has  been selected for furlough leave and ideally should have engaged in some form of consultation with all affected employees. 

Selecting employees for furlough leave on an arbitrary basis could lead to problems in the future.

Collective consultation

If your business unfortunately needs to make 20 or more employees redundant, you must consult with employee representatives. If an employer needs to vary their employees’ contracts of employment and there is a risk that an employer will dismiss those who don’t accept the changes, then the same rules on collective consultation apply.

It is essential that employers recognise that the present crisis does not change their employees’ legal rights. Employers will still be required to comply with the relevant legislation concerning unfair dismissal, redundancy and collective consultation. 

If you have any questions regarding any of the Employment law matters discussed in this article, please get in touch with our Employment law team on 02392 98 1000 or email connect@verisonalaw.com.