Right now, we know you’re facing tough decisions in the workplace, and redundancies are commonplace. Yet, a lack of basic understanding still surrounds redundancy in many businesses.
Our free restructuring toolkit is full of essential information and resources, including a general guide to redundancy, how the redundancy process works and templates for your business plan, consultations, meeting records, notice periods and at-risk employee communications.
In this blog, we’ll give you an insight into what you’ll find in our restructuring toolkit and answer your top 10 most pressing redundancy questions. Read on to gain a clear, practical grasp of redundancy to move forward confidently.
#1 – I have four people and three jobs. Can I make the last one redundant?
No, the “last in, first out” criteria was abolished years ago, as it paved the way for claims of indirect age and gender discrimination and unfair dismissal. Instead, use selection criteria or a competitive interview process to determine who you will make redundant.
#2 – Can I make redundant employees work their notice period?
Yes, as per the terms of their contract. Although employees can try to negotiate a shorter notice period with you, that’s your decision. If your employees refuse to work out their notice, they’ll be in breach of their contract, and you won’t have to pay them for this period.
#3 – Do I have to pay redundancy?
Yes. If your employees have more than two years’ service, they’re entitled to a statutory redundancy payment paid out by the employer.
#4 – Do I have to pay a redundancy notice?
Yes. Regardless of the length of service, all employees are entitled to a paid notice period during a redundancy.
#5 – Can I make a pregnant employee redundant?
Yes, although not because she is pregnant. If you wish to make a pregnant employee redundant, you must follow the proper process and ensure her job is genuinely redundant. If you fail to do this, your employee can claim unfair dismissal on the grounds of her gender and circumstances.
#6 – Can I reinstate the job after making someone redundant?
No. The point of redundancy is that the job no longer exists, so you don’t require that employee’s services to fulfil it. If you immediately advertise for the same position after making someone redundant, it isn’t a genuine redundancy, and you could face legal action.
#7 – If business picks up following a redundancy process, can I reinstate the job?
You should wait between six to 12 months after a redundancy process before introducing and advertising for a similar role, or it won’t be a genuine redundancy. If trade has improved significantly after this period, you can review your requirements and proceed accordingly.
#8 – An employee I wanted to retain has volunteered for redundancy. What should I do?
Redundancy is an employer’s choice, not the employee’s. So, ultimately, it’s your decision to make. However, if your employee is volunteering for redundancy, they are likely to be unhappy in their job and may look elsewhere. Therefore, talk to the employee to address any concerns or issues they have to see if you can help them feel happier in their role.
#9 – Can I take redundant employees back if business picks up?
Yes, you can and should.
#10 – How do I stop redundant employees suing me?
You can’t unless you ask them to sign a Settlement Agreement. All employees have a right to take their claim to an employment tribunal if they feel you’ve treated them unlawfully. However, if you’re confident you’ve followed procedure and treated employees fairly, this shouldn’t pose an issue to your business.
How do I find bespoke redundancy support?
In this blog, we’ve covered the 10 most common questions you’ve asked us about redundancy.
However, if we haven’t answered your question here and you need further advice, we can offer you bespoke support designed around your needs and circumstances.
There’s no need to deal with your HR headache alone – let us ease the pain by providing practical support.
Call us on 0330 555 1139 or email firstname.lastname@example.org, and let’s see how we can help you navigate redundancies with confidence.
Change is coming: are you prepared? This April, the new financial year brings significant changes to the employer landscape – namely, IR35 and the EU settlement scheme. Read on for the key facts and dates you need to know to ensure your business is ready.
IR35 applies to people who work for a business in a self-employed capacity but are essentially employees. Clamping down on this practice, changes to UK law will see HMRC recover unpaid tax and National Insurance from businesses if they believe employers are guilty of using self-employment loopholes to avoid giving employees necessary rights and benefits.
From 1 April 2021, companies that employ more than 50 employees or have a turnover of over £10.2 million will need to pay tax or National Insurance for workers or contractors who are essentially employees.
What’s the difference between an employee and a contractor?
Employees have a contract, paid holidays, PAYE, pensions, and a host of employment rights. Meanwhile, self-employed freelancers, workers, and contractors submit invoices, aren’t entitled to holiday or sick pay, and don’t share the same rights as employees.
EU settled status
Another critical change coming to the world of employment is the EU settled status. This applies to businesses with EU citizens working for them, as the individuals will have to reapply for residency status.
Post-Brexit, EU workers can only remain in the UK if they arrived before 31 December 2020 and have applied for residency via the EU Settlement Scheme.
Once individuals have settled status, they’re free to remain in the UK indefinitely and may be eligible to apply for citizenship.
Pre-settled status is available to those who have been in the UK for less than five years. It permits them to stay for five years, after which they can choose to apply for full settled status if they wish to remain here.
The good news is, there’s still time to apply for EU settled status if you or your employees haven’t done it yet.
The deadline for employees to apply for EU settled status is 30 June 2021. It’s free, and you can do it here: https://www.gov.uk/settled-status-eu-citizens-families/applying-for-settled-status
If you’re unsure whether your employees have a legal right to work in the UK post-Brexit, you can check here: https://www.gov.uk/government/publications/right-to-work-checklist
Can I still employ someone from outside the UK post-Brexit?
Free movement between the UK and the EU ended on 31 December 2020, and a new points-based immigration system is in place in the UK.
So, while you can still employ people from the EU to work in your business following Brexit, they must score the necessary points and have a relevant work permit or status, and you must have a sponsor licence from the Home Office.
Skilled workers who have a job offer from an approved employer sponsor must have a skill level equivalent of RQF3 (equivalent to A level), speak English, score 70 points on the system, and earn at least £25,600 (or the “going rate” for the job).
Employees earning lower salaries may still apply by “trading” points, or if their job is on the shortage occupation list.
You may also transfer an employee from another part of your international business to work in the UK via an “intra-company transfer”, but certain stipulations apply.
Need help preparing for IR35 or post-Brexit employment?
Hopefully, this summary will help you work through the changes coming up in 2021.
If you still need any advice or support, we’re here to help. Call us on 0330 555 1139 or drop us a line at email@example.com
You can also take a look at our webinar below, delivered for RIBA West London to share some insight on HR matters currently affecting their members. After many interminable months of furlough doom and gloom, it was great to talk about how businesses can prepare for the future:
- Brexit and work permits
- IR35 and the impact on contracts
- And more
Check out the recording below and ensure you plan for the upcoming change.
Coronavirus has highlighted an issue that’s been present for years: employees are concerned about being negatively judged for needing working adjustments to accommodate their children. But what will the knock-on effects be and why do we need to act now to support working parents?
We take a look at the ongoing issues that working parents face, outline your legal standpoint and discuss what ‘reasonable’ adjustments can be made as society faces a modern-day childcare crisis.
UK Childcare Crisis
Childcare has been a hot topic since schools shut in March – exposing a lack of support for over 13 million working parents in the UK. That’s about 40% of the working population.
However, this is an ongoing issue. With entire year groups having to isolate and schools being forced to shut, this isn’t a problem that’s going out of the spotlight any time soon. So, why should employers get on board?
The UK is experiencing a childcare crisis – with a recent survey revealing that a lack of childcare played a role in almost half of female layoffs since the pandemic hit. Furthermore, even our keyworkers felt the strain with 67% forced to reduce their hours due to a lack of access to childcare.
It seems unlikely that any working parent will avoid childcare difficulties at some time over the coming months. So, let’s take a look at some of the issues contributing…
Issues of being a working parent
Lack of support for working parents
Have you ever felt concerned to admit to childcare issues or felt worried that you’d be met with a negative response? Well, you’re not the only one.
In fact, of those working mothers that did experience a lack of childcare during the pandemic, over half reported that they were met with negativity from their employer. Moreover, it’s likely that this fear will increase as we head into a recession and the peril of redundancy grows within society.
The lack of support goes beyond the employer, however. At current, accessing support is more difficult than ever. Whilst grandparents may be isolating or friends are unable to mix bubbles and pitch in together, many are looking to paid support in the form of nurseries or childminders.
Yet, they’ll be met with a nasty struggle – as many working parents may have found. Only 56% of local authorities have enough childcare for parents working full-time, meaning that childcare spaces are hard to come by, especially at such short notice.
Despite the need for childcare to be seen as economic infrastructure, the investment simply doesn’t match and prices for childcare are snowballing out of control, as one of the most highly-regulated sectors push prices up year-on-year.
However, parents are left to brunt the cost of this regulation. In 2020, parents are paying an average of £6,800 for a part-time nursery place. That’s 5% more than last year – well ahead of inflation which sits at 1.50%.
Therefore, with childcare costs becoming an increasing strain on the family unit, it’s concerning to see that families are opting to reduce their groceries in favour of childcare, or feel forced to cut their hours to access tax-free support.
A backstep for equality
The role of a mother has shifted from a stay at home mum to working a triple shift – looking after the home, the family and a job.
As the primary caregiver in the UK, it appears that working mothers are perhaps the worst-affected by the childcare crisis, with a recent study revealing that 72% have been forced to reduce their hours (capping their earning potential) due to a lack of childcare.
But what will be the long-term affects of a mother having to put her career second?
- Higher levels of female unemployment
- Less women in senior roles
- Reduced diversity
- Increased gender pay gap
With 46% of working mothers stating that childcare was a deciding factor in their redundancy since the pandemic broke, this issue cannot be ignored any longer.
Therefore, in order to avoid taking a step back into the 40s, we must act now to support working parents as a whole.
An employee is entitled to take reasonable time off as “dependants leave” but only in specified circumstances. There is no statutory obligation on employers to pay the employee for the time off and what is “reasonable” is not mandated.
An employee also has a separate entitlement to take unpaid parental leave of up to 18 weeks (per child), at any time until the child is 18; but advance notice must be given (whereas time off for dependants is designed to deal with emergency situations). One type of leave could transition into the other.
For more information about the rights surrounding work and childcare, download our detailed 9-page explainer in our Return to Work Toolkit.
In addition to dependants leave and unpaid parental leave, anyone who has worked for 26-weeks continuously has the statutory right to submit a formal flexible working request.
The request can include possible changes to work arrangements, such as:
- Reduction or variation of working hours
- Reduction or variation of the days worked
- Working from a different location, eg home.
Employer Support – Going The Extra Mile
With all that said, what can employers do above the legal minimum to make the lives of working parents better? Well, here are just a few things to consider:
Normalise Working Parents
Everyone knows THAT news segment where the toddler broke in during an interview on BBC. But, have you seen how they handled the more recent interview with Dr Clare Wenham and her toddler’s unicorn? Normalising parenting can go a long way to reducing anxiety around childcare.
As with all change, ensure your leadership get on board and lead by example – being a parent and being a professional should not be a paradox.
As the pandemic escalates the shift away from ‘traditional’ ways of working, it’s important to carefully consider your employee’s requests and try to be as accommodating as possible. Failure to do so will likely push them towards a decision of ‘work or home’ – meaning that you could lose out on quality talent.
Download our free flexible working request form and flexible working methods explainer here.
Simple and effective: showing compassion and understanding to working parents can reduce the fear surrounding this widespread issue.
In such stressful times, employers should be making it as easy as possible for working parents to follow the rules and government guidance. For example, if an employee is concerned that they will lose their job if required to care for children forced to isolate, they may be encouraged to illegally break the isolation period to hide issues from their employer. This will put your workforce as a whole in jeopardy.
To combat the negative experiences of many, we must establish a safer, more understanding environment where employees are able to be transparent about the issues they face – without fear of an adverse reaction.
Putting formal policies in place to protect both the employee and employer can help establish a more collaborative approach to problem-solving. For example, by having a homeworking policy in place, employers can feel in control of individuals who seek to work from home on a more permanent basis.
Download our free policies here, including:
- Homeworking policy
- Health and wellbeing policy
- Flexible working policy
Gender Pay Report
Whilst it isn’t legally required by all businesses, publishing an annual gender pay report can help employers to become conscious of inequalities within the business.
Consider checking in on the differences between genders in regards to pay, promotional opportunities and recruitment. The first step of righting a wrong is identifying it, after all!
Need more help?
During these testing times, the team at Crosse HR are trying to do their bit – supporting small businesses by providing free templates to help time and resources go further.
However, if you require further expert HR support and consultancy, please get in touch. Contact Crosse HR for shrewd, sensibly priced HR solutions you can rely on.
Settle Status: EU Workforce
Do you have employees from the EU working within your business? Changes to the law may mean that they have to reapply to secure their residency status with the new EU Settle Status.
To make this transition period easier, we’ll be stepping you through what you need to know as an employer to support the welfare of these employees in such indefinite times.
What is the EU Settle Status?
On 31 January 2020, the United Kingdom officially left the European Union. Although no official deal has been agreed upon yet, changes have started to slowly filter through – one of the largest being ‘Settled Status’.
But what is settled status and why does it matter?
Settled status is the term for being a resident in the UK without any immigration restrictions on the length of your stay. There are two types of status in the EU Settlement Scheme:
- Settled status
- Pre-settled status
EU citizens who are granted settled status are permitted to stay in the UK as long as they choose; they can also apply for a British citizenship if they are eligible.
Pre-settled status – which is usually granted to those who have not lived in the UK for five continuous years – allows inhabitants to stay in the UK for a further five years from the date they are granted pre-settled status. After this period, individuals can reapply for full settled status.
The deadline for applying is 30 June 2021.
It is free to apply to the scheme through the government website.
Before beginning the application process for settlement status, applicants should have ready proof of identity and residency. It may also be worth double-checking that applicants have not already received pre-agreed settle status here.
What does this mean for employees?
Citizens of the EU, EEA or Switzerland can apply to the EU Settlement Scheme to continue living in the UK after 30 June 2021. Without confirmed settlement status, these citizens will not have the assumed right to:
- Work in the UK
- Use the NHS for free
- Enrol in education (or continue studying)
- Access public funds, such as benefits (if eligible)
- Enter the UK without a visa
Employees that do not have settled status face the potential risk of having paperwork refused, being unable to work legally in the UK and even deportation – uprooting their family, career and life.
Therefore, it is important to support your EU workforce through their application to ensure there is no disruption to their legal right to work or live in the UK after this deadline.
How can employers help?
Importance of application:
As employers, there is no legal requirement to inform your workforce of the impending deadline but it’s a good idea to ensure there are no legal hiccups (and it also feels like the right thing to do).
Employers do not require proof that employees have applied but getting status through the scheme will protect their future rights, so it is very important that they apply if you want them to continue working for you.
There are a few practical steps you can take to encourage your employees to apply.
Why not start by sending a letter to all your EU employees? It doesn’t have to take much time with letter templates already drafted up and ready to go. You can also ensure visual cues help prompt their minds by displaying informative posters.
Remember: although you can encourage people to apply, as an employer, you cannot ask them whether they have or about the outcome.
Supporting the process itself:
The process itself was designed to be as seamless as possible. However, with the added complication of coronavirus, a few spanners have been thrown in the works.
Due to many businesses being shut for a number of months and international travel complications, employees may have struggled to renew expiring passports. Therefore, workers may require flexible hours or additional holiday days to address this before their application.
Further, it may be useful to make your facilities available for support. For example, at this time, many printing shops and internet cafes are shut due to the pandemic. Therefore, pre-granting access for your employees to use your scanner, printer or work phone for their application may aid their progress.
Finally, although it is not standard procedure, if the employee requires any documentation to support their application then provide this in a timely manner; holding this process up will cause additional stress for the employee, distracting them from their work and prolonging indecision.
The uncertainty formed in the last few months has had an impact on everyone. However, we must consider those who experience further doubt about their rights within the country compassionately.
Managing stress and keeping a close eye on employees is essential at all times. Look out for key indicators of deteriorating wellbeing, such as:
- Reduced engagement
- Missed deadlines
- Lower morale
- Increased tiredness
If you notice a significant shift in their wellbeing, it may be time to check in; look out for tell-tale signs of poor employee mental health and be ready to act.
Where possible, refer employees for additional support and be compassionate towards their situation. It may be worth considering ways you can support employees with stress outside of work with flexible working, duvet days or even a shift in the workplace culture.
The charity MIND has some great, free resources to help individuals manage stress – at work and home. Could sharing some of their best resources equip your taskforce with more resilience?
Considering your current employees is a great first step, but what about future employees?
If you are planning on recruiting before the settlement deadline, it’s important that you don’t sit on your hands.
Speeding up your recruitment process will allow your business to:
- Beat the deadline;
- Widen your search for talent;
- Allow the successful candidate (if from the EU) to apply for settlement status in time.
As an employer, you have a duty “not to discriminate against EU citizens in light of the UK’s decision to leave the EU as both a prospective and current employer”.
That means that you cannot make an offer of employment, or continued employment, dependent on an individual having made an application. However, consideration should not stop here; ensure you address workplace discrimination at all levels for a safe working environment for all.
- Checking your processes and procedures for bias
- Educating employees on how to report discrimination
- Including EU citizens in your diversity reports
- Reminding employees of the fine line between ‘banter’ and discriminatory harassment
- Ensuring you have the processes in place to address hostility appropriately
Right to work checks:
It has been confirmed that there will be no change to right to work checks until 1 January 2021. That means that job applicants can continue to prove their right to work using any of the following:
- their valid passport or national identity card if they’re an EU, EEA or Swiss citizen
- their valid biometric residence card if they’re a non-EU, EEA or Swiss citizen family member
- their status under the EU Settlement Scheme using the Home Office’s online right to work checking service.
You will not be required to undertake retrospective checks on existing EU employees. Therefore, changes will only apply to applications in the new year.
For more information, read the official right to work checklist here.
For official support on how employers should support the EU Settle Status scheme, GOV have created an ‘employer toolkit’ here.
However, if you require expert HR support and consultancy, please get in touch.
Clarity Beats Uncertainty
Remember that round: ‘What Happens Next’ from a Question of Sport?
At the moment, we are all asking that question constantly…
- What changes will there be to lockdown restrictions?
- Will any uptick in revenue stall?
- Will people be able to pay me for work done?
So, to combat all this uncertainty we can at least ensure that we have clarity of where we need to be and the impact of missing or achieving those targets. This way, we can act fast to address any issues – being proactive with cost-cutting, additional funding or growth planning, as required.
When meeting regularly with my clients we look at certain key targets to help them know where they need to be. Let’s take a little look at what these are.
Understanding breakeven will highlight a good from a bad month.
If you are making profits it will trigger a need to ring fence monies for future corporation tax. If you are making losses, then you need to understand the impact on retained earnings (i.e. the profits you have built up over the years).
This is particularly relevant if you take part of your income as dividends. Dividends can only be taken where there are sufficient retained earnings and repeated losses will erode this and so you will need to monitor your position.
Knowing your breakeven will ensure you don’t get to year end without either sufficient provision for corporation tax or having taken illegal dividends.
2. Cashflow Neutral
The income you require to be cash neutral each month may well be higher than your breakeven. This might be due to loan repayments or if you take some of your income through dividends.
Knowing this straight away will help you understand if your bank balance will start reducing and immediately by how much. Clients may not pay straight away but already you have the insight as to how much your cashflow will be impacted even after all invoices are paid.
We also look at the capacity that the current workforce can deliver in terms of income.
This helps in two ways.
Too much resource:
Firstly, we can understand if we have too much resource for current levels of income and assess how long we can support this.
Not enough resource:
Secondly, and on a more positive note, we can see as the business grows when we will need more resource. We can assess whether to employ or outsource and we can do this in advance of hitting capacity thus ensuring service levels are maintained.
4. Bank Balance
Many clients start off thinking just monitoring their bank balance is sufficient.
I can see why they think this way, but this just tells you the here and now and doesn’t help anticipate the impact of loss-making months now. With many businesses having recently taken out Bounce Back Loans their bank balances are currently quite healthy and can, in fact, be masking issues for later down the road.
So, in summary, to grasp back some of that certainty, ask yourself if you know these three figures. With our environment being so uncertain, you at least know where you need to be and the impact of falling short or exceeding it – because clarity beats uncertainty.
About Helen Fleet:
Helen Fleet of HF Financial Strategy works as a Finance Director and guides companies to deliver their financial and business objectives. This can include cashflow planning, pricing reviews and ways to improve profitability.
For more information about HF Financial Strategy, visit her website here or discover more of her guest blogs here.
We decided, as part of the Coming back from Covid series, to give you a quick guide to restructuring.
Whether you are just moving the chairs around the room or making people redundant, our Restructuring Toolkit should provide you a great place to make a start.
We’ve included some templates to help you along – helping you make the most out of your limited time and budget at this difficult time. We sincerely hope that it helps with this difficult time ahead.
To quote the title of a famous Sam Cooke song, one of the many consequences of the lockdown is that we have all had plenty of time to think, ruminate and ponder about our lives. For us business owners, this time of reflection has extended to include our businesses.
As a result, many may well be facing the prospect of changing their business to adapt to the changing times – be it out of necessity or because you have finally had the time required to get your house and business in order and consider the future.
In short, whether we like it or not ‘A change is gonna come’.
Restructuring Your Business
Whether a restructure is a choice or your only option, it can feel like a pretty overwhelming task to approach alone… So, where should you begin?
Below, we share some of the common questions we get asked about restructures and provide clarity to help you on your way.
“Can I just ‘do it’?”
Yes, you can. However, we recommend getting a restructure plan in place first.
This doesn’t have to be anything fancy or a scary task. Just write out your rationale for doing it, the consequences it will have, the timeline for carrying it out and the process that you will follow.
Doing so will help you gather your thoughts and put some structure around it, so that you can communicate it to your staff.
“What is consultation?”
Consultation is borne out of Information and Consultation Directive, where employers are obliged to consult with employees on any aspect that will affect their employment.
Before you moan, you really should do it!
However, be sure not to confuse consultation with negotiation. Whilst you should take on board your employees’ views about the restructure, you are under no obligation to actually implement those views.
“Do I have to consult?”
Yes, because failure to consult can cost you.
An employment tribunal can award a penalty for failure to consult. And, in the case of TUPE (Transfer of Undertakings – Protection of Employment Regulations), that award is 13 week’s salary.
“How long should consultation last?”
There are no hard and fast rules if your business has less than 20 employees. However, it should be no less than a week and as much time as possible.
“Can I use Last In, First Out?”
We’re telling you now – no you can’t. We’re not sure where the LIFO philosophy came from but forget you ever heard of it.
“Does furlough cover redundancy?”
The short answer is no.
If you are looking to end furlough to make your employees redundant, seek further support or contact us.
“What is selection criteria?”
Selection criteria is the basis by which you will select employees for redundancy.
The criteria can be based on attendance, performance, disciplinary, experience and qualifications to name but a few. Some businesses choose to base this on a competitive recruitment process.
Helping You Restructure
We decided, as part of the Coming back from Covid series, to give you a quick guide to restructuring.
Whether you are just moving the chairs around the room or making people redundant, our Restructuring Toolkit should provide you a great place to make a start.
As we are a generous lot here at CrosseHR, we’ve also included a few templates to help you along – helping you make the most out of your limited time and budget at this difficult time.
And remember, if you need any further help with your restructure or any HR concerns, we are just a phone call away: 0330 555 139.
What’s included in our Restructuring Toolkit?
Our restructuring toolkit is free to download here. Included within it is:
- Restructure business plan template
- General guide to redundancy and the redundancy procedure
- Consultation invitation letter template
- Template for recording individual consultations
- Letter template to inform employees they are ‘at risk’
- Formal redundancy notice template
You can download it for free here.
If an applicant or employee has a criminal record, that doesn’t mean they aren’t right for the job.
You may be surprised to learn how many people end up with a criminal conviction by the age of 53. So, how does this affect your hiring decisions?
We explore this and more in our presentation below.
Get to understand criminal record checks in our presentation below, including:
-The Rehabilitation of Offenders Act
-Different Types of DBS
-Spent vs Unspent Convictions
Please play and pause the slideshow by pressing the button in the bottom left of the video.
If you have any questions, please don’t hesitate to get in touch.