Help for Employers - Redundancies

Covid-19 Impact on Business and Employees 

 

The world seems a very different place to what it was like for most of us a few months ago. 

 

With no firm indication of when and how lockdown restrictions will be lifted we are having to adapt to different ways of doing business. 

 

Remote working has become the norm for a lot of people, but this is not always possible. If employees have to go into their workplace employers must ensure that social distancing measures are strictly adhered to. 

 

The government has tried to lessen the impact on business by providing a range of financial assistance, such as business interruption loans, deferment of tax payments and business rate holidays. The introduction of the Job Retention Scheme, whereby the government will provide a subsidy of 80% for staff wages, is an attempt to save jobs. 

 

However, despite these very welcome measures, it is probably inevitable if the lockdown is prolonged that businesses – large and small - will have to consider redundancies at some stage. 

 

Redundancies 

 

If, as a business owner, you think that you may have to make staff redundant now or in the future, it is essential to plan early for this so that the process can be made as stress-free as possible for everyone involved.   Failure to do - whether you have one employee or thousands - can cause frustration, disruption and increased cost to business. 

 

Settlement agreements 

 

Settlement Agreements are commonly used in redundancy situations.   A Settlement Agreement is a written agreement between an employer and an employee which terminates the employment. 

 

It sets out the terms which have been agreed between the parties, including the amount of salary, redundancy pay, holiday pay etc which is to be paid and when.  The agreement is a confidential document and so contains a confidentiality clause.  Other clauses to protect the business are also written into Settlement Agreements. 

 

The main objective of a Settlement Agreement is that the employee agrees not to bring any claims against the employer once payment has been made. This enables the parties to have a ‘clean break’ and provides certainty and reassurance to the business.  The last thing a business needs on top of the problems caused by the impact of Covid-19 is the fallout from an employee bringing a claim in the employment tribunal following their departure from the business.   This can have a devastating effect on the business. 

 

Settlement Agreements are a simple and cost-effective way of avoiding these problems, however it is very important that the process is handled properly and that employees are dealt with in a sympathetic and understanding manner. 

 

How we can help 

 

To ensure that you are taking all the right steps, following the correct procedure and minimising risk to the business then it is crucial that you take legal advice at the earliest opportunity. 

 

For help with redundancies or settlement agreements contact me in confidence diane@dsmlegal.co.uk or telephone 01925 937070.