In the last few days we have seen a number of large companies announce rounds of redundancies for their staff. In all likelihood, this is just the start of what will be an unfortunate story for many workers, with as many as three out of four of the UK’s leading businesses planning to cut jobs.

These announcements come in anticipation of the beginning of a gradual shift in the Government’s furlough scheme. From August, national insurance and pension contribution will have to be covered and from September onwards an increasing percentage of wages will have to be paid out of employers’ pockets rather than from the public purse.

Redundancy

Under the Employment Rights Act 1996, an employee is taken to be made redundant if their dismissal is “wholly or mainly attributable” to the fact that (a) the employer has ceased (or plans to cease) business, or business in the place where the employee was employed; or (b) the business no longer requires employees to carry out work of a particular kind, or as such in the place where they were employed.

Consultation

One of the reasons that we are hearing about these redundancies now – even though the costs of paying furloughed staff has not yet kicked in – is that section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 requires collective consultation in advance where large numbers of employees at one establishment are to be made redundant within a short timeframe. Where there are 20 to 99 employees, the process must begin at least 30 days before the first dismissal; for 100 employees or more it must be 45 days.

In cases where fewer employees are at risk, there is still a duty under section 188 that a reasonable consultation should be held in good time before a potential dismissal. Exactly what that will entail depends on the circumstances: less will be required in a consultation at a small workplace that is inevitably going to be closing down than in a large organisation that might just be contemplating restructuring their services.

Failure to properly consult with someone before making them redundant means the chance of them bringing a claim for unfair dismissal at the Employment Tribunal – provided that they have been working for that employer for at least two years.

Discrimination

In addition to completing a proper consultation, any redundancy process must also make sure that it is not marred by unlawful discrimination. Even in cases where an employee has less than two years of service and so not required to go through a redundancy process, a decision to dismiss them can still be unlawful if it is tainted with discrimination.

The Equality Act 2010 makes unlawful discrimination on the grounds of a number of “protected characteristics”. These are:

• age;

• disability;

• gender reassignment;

• marriage and civil partnership;

• pregnancy and maternity;

• race;

• religion or belief;

• sex; and

• sexual orientation

Discrimination can come in various forms. The simplest is direct discrimination under section 13 of the Equality Act. Direct discrimination is where someone with a particular protected characteristic is treated less favourably than someone without is or would be.

In a redundancy context, this might mean making disabled or pregnant staff redundant, simply because they are disabled or pregnant. Most employers will not engage in this kind of discrimination openly – it is likely that if a protected characteristic is the reason for someone’s dismissal, efforts will be made to suggest that there is another reason. As such, any potential claim will depend on what evidence can be gathered. Is it possible to show that an employer has only selected disabled people for redundancy, without them being able to give a good reason why? Have emails been found which show a manager deciding that they do not want to keep employing someone about to go on maternity leave?

Even in a redundancy process where an employer thinks that they are acting completely lawfully, discrimination might creep in. If an individual is assessed in a manner which – although applied equally to everyone in their redundancy pool – puts those that share one of their protected characteristics at a particular disadvantage, then the employer will have to show that the assessment criteria is a proportionate means of achieving a legitimate aim. This is because otherwise it will amount to indirect discrimination, which is made unlawful by section 19 of the Equality Act 2010.

A common example of indirect discrimination in a redundancy situation is a “Last In, First Out” policy of making redundant those employees who most recently joined the company. While this might at first seem fair, this puts younger people at a disadvantage as they necessarily will not have had the opportunity to build up a long period of service with the employer. As such, an employer would need a particularly good reason to show why such a policy is necessary for them to be able to implement it lawfully. Another example could be where an employer decides to only keep employees who have a 100% attendance record – this will put disabled members of staff at a particular disadvantage and, given that taking a rare sick day does not make you a poor employee, such a policy would likely not be seen as proportionate.

The Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 provides additional specific protection for part-time workers. If someone can establish that they have been selected for redundancy because they are working part-time – and a comparable full-time worker was not – then this will make their dismissal automatically unfair unless it can be justified on objective grounds. Redundancy decisions which take into account factors linked to part-time working may also be indirectly discriminatory on the grounds of sex, as women are more likely to have caring responsibilities and so work part-time as a result.

Redundancy during maternity leave

Regulation 10 of the Maternity and Paternity Regulations 1999 affords special protection to employees who are made redundant during their maternity leave, in that such employees are entitled to be offered (before the end of their employment under the existing contract) alternative employment with the employer, its successor, or an associated employer. This is provided that there is a suitable available vacancy – one that is appropriate and does not place the employee in less favourable conditions than their previous role.

Time limits and bringing a claim

If an employee believes that they have been treated discriminatorily or even just unreasonably when being made redundant, they have the opportunity to bring a claim to the Employment Tribunal.

However, the time limits for claims are short; for redundancy cases a claim will typically have to be started within 3 months of dismissal. Claimants will have to go through the ACAS conciliation service before a claim can be brought, but that stage pauses time for the purpose of the three-month limit and generally allows for an extension so that there is one month to bring a claim after the conciliation process is finished.