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Workplace Trends: Planned redundancies at lowest level in 6 years

July 22, 2021

In June 2021, the Insolvency Service analysed the data from the submitted HR 1 forms, and announced that the number of reported planned redundancies is at a six-year low across England, Scotland and Wales. The BBC has reported¹ that the redundancy figures for June saw 15,661 positions put at risk in Great Britain. This shows that there has been a considerable reduction in the number of planned redundancies in comparison to the worst ever reported rates of redundancies in June 2020.

Employers are required by law to notify the government² of a proposal to dismiss 20 or more employees as redundant at one establishment within a period of 90 days or less. Employers notify the government by completing an advance notification of redundancies – a HR 1 Form. If an employer does not comply with the statutory notification requirements without good cause then this may result in prosecution and a fine, on summary conviction, for the company and/or officer of the company.

Employers must complete a HR 1 Form for each site where 20 or more redundancies are proposed. The minimum periods for notification and consultation are:

  • between 20 to 99 redundancies at one of your establishments, the minimum period is 30 days before the first dismissal
  • 100 or more redundancies at one of your establishments, the minimum period is 45 days before the first dismissal

Employers must notify at least 30 or 45 days (depending on the number of dismissals) before the first dismissal and before they issue any individual notices of dismissal.

However, those in our employment team who represent senior executives, have come across concerning examples recently where employers (from large corporates to SME’s) are seeking to bypass [or in some cases to brazenly ignore] the formal notification process, and also the consultation process. For example, by asserting that the reason for dismissal of an individual, or a group, is for another statutory reason such as – performance related reasons. So the newly released data may not accurately show what is happening on the ground – especially for SME’s who may be making redundancies, but who may have less than 20 staff. Predictions of large-scale redundancies have not – as yet – come to pass. However, that may change now that the furlough scheme has come to an end.

Across the Atlantic, many industries are seeing a surge in staff leaving their existing jobs for better paid jobs elsewhere. This has been referred to as the “Amazon effect”, as Amazon pays warehouse staff more than competitors. In the UK the hospitality industry is facing a shortage of staff, and some are offering a premium to recruit more staff. We shall see if the Amazon effect lands on our shores, and if it helps to level up the economy.

The material contained in this article is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for your specific circumstances and before any action is taken.

@ Miller Rosenfalck LLP, July 2021

¹ https://www.bbc.co.uk/news/business-57826625

²The Insolvency Service’s Redundancy Payments Service.

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