Restructure: does it always mean redundancy?

Sadly, redundancies have been all too common following the economic fallout of COVID-19. They should only ever be a last resort, but what happens if you need to rehire after making redundancies? After all, events are moving so fast!

There’s no legally-mandated waiting period for rehiring – even taking back the same people…. however, proceed with caution. Should someone make an unfair dismissal challenge at Tribunal, the Court will look at the whole redundancy process up until termination. There are many technical points to get right, and also, the economic uplift that prompted your renewed hiring must be proved to have happened after the termination date.

I’d advise exploring all options before making redundancies which includes the latest Government initiative under the 'Winter Economy Plan':  The “Job Support Scheme”

The highly anticipated announcement detailed how the government supports “viable jobs” for the next six months, following the end of the furlough scheme on 31 October.

Acknowledging that we are at a different stage of the pandemic, the Chancellor said that “Furlough was the right policy at the time we introduced it…but as the economy reopens, it is fundamentally wrong to hold people in jobs, that only exist inside the furlough”.

• The new Job Support Scheme, which will commence from November and continue for six months, is said to be based on the following three principles:
• The scheme will support viable jobs, meaning that employees must be working at least one third of their normal hours and be paid for that work as normal by their Employer.
• Targeted support to help those businesses that need it the most. Crucially, all SMEs will be eligible, but larger businesses will need to be able to prove that they have been adversely affected and show a decrease in turnover due to the pandemic.

There are a couple of crucial things for you to remember:

• All employers can apply (although it is primarily for Small & Medium sized businesses)
• Individuals don’t have to have been on the furlough scheme previously

Paying employees on the new scheme (or how does 1/3 + 1/3 + 1/3 = 77%?!)

Employees must work at least one third of their normal hours (33%) for which they must be paid for as normal by their Employer.

That leaves 66% of their hours and pay remaining which is relevant for 'support' purposes. The Government and the Employer is picking up a 1/3 of this 66% each - so 22% each (66% divided by 3)

The Governments contribution is therefore 22% of their normal wages and the Employer pays 55% (ie the Employer pays the 33% the employee works + the 22%)

And altogether - that gives a grand total of 77% due to the individual

Now that we've done the maths; what else do Employers need to know?

The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.  It will support 'viable' jobs.. but no information on what conditions are attached to that

and...

Redundancies are not permitted: Whilst we await further details on the scheme it has been made clear that employers will not be able to issue redundancy notices to those on the new support scheme.

So maybe it’s time to revisit the ‘Kickstart’ scheme?

A quick reminder of what it entails:

• Government funding will pay for six-month job placements offered to young people on Universal Credit and at risk of long-term unemployment.
• While some of the detail of the scheme is yet to be confirmed, the support looks to be comprehensive, covering National Minimum Wage for 25 hours per week, national insurance and auto-enrolment pension contributions, as well as set-up costs.
• The Kickstart scheme is for companies hiring at least 30 people, but smaller businesses can pool together to meet the minimum requirement… and in many cases, your local Chamber of Commerce is providing this service for free.

The rules of the Kickstart scheme are one thing, but it’s important for employers to be aware of other rules that still stand, relating to employing young people.

The minimum school-leaving age in England is 16. However, school leavers must, until the age of 18, carry out work-based training like an apprenticeship, or continue their education part time if working, or remain in full time education. These requirements do not apply in Scotland and Wales.

So there is scope to be employing 16- and 17-year-olds, and if so the Working Time Regulations state that they cannot work more than eight hours a day or 40 hours a week. They must also have at least a 30-minute break if working for more than 4.5 hours. There are stipulations about rest periods between shifts and on a weekly basis too. There are some restrictions around night working if this is relevant to you, including a total ban on working between midnight and 4am.

Under health and safety law, employers have a duty of care towards all employees, but there are extra considerations when employing 16- and 17-year-olds. Much of it will seem like common sense but it is enshrined in law. You need to ensure they are not exposed to risk due to their lack of experience, maturity or from simply being unaware of existing or potential risks. You must consider a range of factors such as workplace layout, health and safety training and work equipment among other things.

Once basic safety is covered, let’s not forget that they may be completely new to the workplace and the etiquette and responsibility that goes with that – even if they are a little older than 18. All new hires need a degree of onboarding, and it may be best to go a little further with young, inexperienced people. Having clear policies and communicating them well is a strong first step here. Many businesses will have bespoke onboarding programmes and mentoring schemes which will help further.

And of course, the Kickstart scheme does reimburse pay  at minimum wage  for 25 hours a week. If they work more than that you’ll need to cover it at the relevant minimum wage rate or higher.

As I said last month, with so many people having had to look at different ways of working; including new careers; now might be the ideal time for you to consider whether one of these schemes could both help you expand your business and provide someone with a new opportunity…. Before you start down the road of redundancy!

About the author:

© Níamh Kelly – Director of The HR Dept Shropshire and The HR Dept Wrexham and Chester,  is  an award winning HR professional with over 25 years HR experience at a Senior level in the corporate, public and voluntary sector.  Working with SMEs, she and her team have rapidly developed a very strong client base of local companies.   So if you have a question about Recruitment & Right to Work; to Resolving Problems; to Redundancy… she’s here to help you!