Quarter of firms unaware of redundancy consultation legalities, research finds

With many planning to inform workers of layoffs via phone or video calls, employers must build in extra time for logistical issues, say experts

More than a third of employers (37 per cent) are likely to shed jobs by the end of the year, with many admitting to being unaware of their legal responsibilities around consulting staff, according to Acas.

Its survey, which polled more than 2,000 business representatives and was conducted by YouGov last month, revealed large companies were more likely to be looking to cut jobs, with 60 per cent of firms with more than 250 employees anticipating redundancies.

It found a quarter (24 per cent) of companies admitted they were not aware of their legal responsibilities around consulting staff before making redundancies, rising to a third (33 per cent) of small businesses.

Of those planning to make redundancies, more than a quarter (27 per cent) said they would be telling staff via video calls or over the phone. Only a third (33 per cent) intended to tell people in person.

Neil Carberry, chief executive of the REC, said the figures were “sad but perhaps not surprising”, as many businesses had been struggling over the past few months. But, he warned: “It is essential they know the law before making any decisions.”

Redundancies must be a last resort and employers “must use a fair and balanced selection process and conduct consultation proceedings with those employees with as much warning as possible”, he said.

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Given the significant number of redundancies expected over the coming months, Rachel Suff, senior policy adviser for employment relations at the CIPD, said it was “very important employers and HR plan these in the most humane way possible”.

Companies may need to build extra time into the consultation process to allow for any logistical issues arising from telling people remotely rather than face to face, she said. And employees still had the right to be accompanied at these meetings. “Every employer should approach a redundancy process with compassion and treat everyone with dignity, respect and kindness,” added Suff.

Consultations needed to be meaningful, and as such employers should factor in the difficulties that conducting these processes over the phone or via video calls could present, agreed Joanne Frew, UK head of employment at DWF. “A message that can be delivered clearly face to face can get lost over electronic communication,” she said.

Frew added that consultation with individual employees was “fundamental to the fairness of any dismissal for redundancy” and collective consultation was required in any situation involving 20 or more redundancies. “The fact that 24 per cent of employers are unaware of this law is a concern.”

The figures followed several other worrying reports about the likely scale of redundancies over the coming weeks. Last month the Institute for Employment Studies (IES) warned the UK was likely to see around 450,000 redundancies this autumn alone. The former chief economist at Lloyds Bank, Trevor Williams, recently estimated unemployment in the UK could reach 13 per cent – equivalent to around 4.4 million people – by the end of the year.

Acas said it had seen a steep rise in redundancy-related calls to its helpline, with 33,169 calls in June-July this year, up from 12,313 over the same period in 2019. It said it had also seen a four-fold increase in visits to the redundancy advice content on its website since the start of this year, up from 111,000 visits in January to 430,000 in August.

Susan Clews, chief executive of Acas, warned it was “important for [employers] to act responsibly and follow our advice or they could be subject to a costly legal process”. Clews added that employers must “exhaust all possible alternatives” before making redundancies. “If employers feel they have no choice [but to make redundancies] then they must follow the law in this area,” she said.

Frequent communication and updates would be vital in ensuring employees knew the current situation, said Dr Zofia Bajorek, research fellow at the IES. And employers needed to help employees recognise the skills they had that would help them change roles, said Kirstie Donnelly, chief executive of the City & Guilds Group.

“There is also a need to urgently provide the funding and infrastructure needed so that people can access digitally enabled and flexible training to help them gain the top-up skills to get back into work,” said Donnelly.

Yesterday (30 September) marked the deadline for employers to issue redundancy notices if planning to lay off between 20 and 99 workers before the current furlough scheme ended on 31 October.

Separately, shadow chancellor Anneliese Dodds today claimed the jobs of almost three million people working for small businesses were "hanging in the balance" as a result of the government's "flawed" job support scheme.