Collective redundancies and the Coronavirus Job Retention Scheme (CJRS)

There is a risk that uncertainty as to whether the Coronavirus Job Retention Scheme (CJRS) will remain in effect beyond 31 May 2020 could create difficulties for employers that need to make collective redundancies.

Depending on the numbers of redundancies an employer may have to consult collectively with affected employees under the Trade Union & Labour Relations (Consolidation) Act 1992, meaning with unions (if they are recognised by the business) or employee representatives (who will have to be appointed or elected by those employees whose jobs are at risk of redundancy).

The collective consultation period is 30 days if an employer is proposing to dismiss 20 or more employees within a 90 day period, rising to 45 days if it is 100 or more employees.

With the CJRS being due to run until 31 May 2020, if an employer wanted to time redundancies to be effective from the end of the period before they contractually bound to pay 100 per cent of the employees’ salaries again (particularly if the business is in financial difficulty), then they will need to start considering commencing consultations shortly. For 20 or more employees within a 90 day period 30 days prior to 31 May 2020 (1 May 2020) and for 100 or more employees 45 days prior to 31 May 2020 (16 April 2020). Otherwise consultations would have to continue after the employee has returned from furlough, if the CJRS is not extended.

There is an exception to the collective redundancy rules. This rule provides that where special circumstances render it not reasonably practicable to consult in good time or provide the statutory information to employee representatives, the employer need not fully comply with the duty, but must still take such steps towards compliance as are reasonably practicable.

Whilst a global pandemic is clearly creating an urgent cash flow issue, if the business does have more time to respond, then it may not be able to rely on the special circumstances defence. The Coronavirus Job Retention Scheme might also now give employers more time to follow the collective redundancy rules.

Bulk settlement agreements may offer employers a way to deal with this unprecedented set of circumstances. We are able to provide detailed advice on the steps involved in pursuing this option.

Should you be considering redundancies, we offer a fixed-fee redundancy pack.

For a one off fixed fee you will receive: