Restraints Of Trade

Redundancies in a COVID age

Redundancies in COVID seem inevitable for many businesses, As we continue to deal with serious COVID restrictions, many small business owners will be near the limit of their reserves. Given the biggest overhead for most businesses is salary and wages, it is inevitable some of us will look to cut costs by making employees redundant. This happened after the 2020 national lockdown and is happening again now.

Unsurprisingly, some employers are not taking the care they usually would when making changes which affect staff. Our current situation could be creating a sense of panic and lead to rushed decision-making. Good employment practices are being forgotten and employees are being made redundant with little or no consultation or exploration of alternatives.

However, running a proper process before deciding whether to make an employee redundant does not cost anything. It will generally result in better decision-making and reduce the sense of loss and unfairness felt by the staff concerned.

In addition, it will also keep us out of court and avoid potentially significant claims for compensation and lost wages.

Nothing justifies employment laws going out the window

The Employment Relations Authority has already heard several cases relating to redundancies prompted by the 2020 national lockdown. The overriding theme to emerge from these cases is that even in the extreme circumstances of a lockdown, an employer is still required to act in a fair and reasonable way and comply with usual employment laws.

Every week we can read about expensive lessons learned by others in this space. Let these be a reminder to all of us to tread carefully. The bottom line is that we are entitled to make a decision to downsize our businesses, and in some cases the need to cut costs may be urgent. However, there is no excuse for not consulting with affected employees. This does not need to be a lengthy process, but it does need to be a genuine one.

Once again the message to employers is clear: employment laws do not go out the window in COVID times.

Feel free to contact us for guidance on good restructure process, disestablishing positions and/or changing roles.

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