43% of UK business owners ‘not confident’ in making redundancies in line with the law

43% of UK business owners are not confident they could make redundancies in line with the law, according to a survey carried out by BrightHR.

With a third of UK organisations expected to cut jobs in the next quarter of 2020, according to the latest Labour Market Outlook, the firm says its results are a big concern, as even the smallest mistake could result in employers facing employment tribunals and hefty legal penalties.

The survey of 2,000 small business owners also found that 51% of employers were not clear on the redundancy process during or after furlough, with lots of confusion surrounding whether redundancy pay is based on employees’ normal wages or their furlough rate of pay.

Alan Price, CEO of BrightHR, said:  “With the UK Government’s Job Retention Scheme winding down and many businesses having to let staff go to cope with changing levels of demand, redundancies are currently an unfortunate necessity for many companies. But you need to explore every other option first.

“Because if the worst happens and an employee takes you to a tribunal, a judge will expect to see a firm business case for why you had no choice but to make a role redundant. The tribunal will also want to see that you’ve followed the correct redundancy process. Failure to do so could lead to you making a big pay out to your former employee. None of this is easy. Contract changes and redundancies are among the most complicated areas of employment law. Therefore, it’s essential that employers either understand the redundancy process or they have the relevant tools and people to assist them with making the right decisions in line with the law”