The Answer
Following the announcement by the government in their 2024 October budget that from April 2025, employers obligations on National Insurance Contributions (NICs) will increase, resulting in employers paying National Insurance at 15% on salaries above £5,000, instead of the current arrangement of 13.8% on salaries above £9,100 and together with the increase in the National Minimum Wage obligations, surveys carried out by the CIPD and the British Chambers of Commerce (BCC) have identified that a fair percentage of businesses that were surveyed intend to cut jobs or recruit fewer people, together with businesses looking at scaling down investments and reducing its growth expansion.
What You Need To Know
Other than quick fixes to reduce business costs such as a non-contractual salary pay rise freeze or raising productivity by improved efficiencies, businesses need to consider long term goals in terms of workforce planning to ensure that they do not fall behind with the people skills required for their businesses thus not jumping to a jerk reactions to make redundancies to save costs in the short term and to consider taking professional advice and guidance on such matters, but if there is no alternative but to consider redundancies, then employers must ensure that a fair and reasonable redundancy process is followed that is legally correct.
A redundancy process can be quite complex, especially where employers have several employees at risk of redundancy and looking to retain some of those employees who are at risk of redundancy, the matter can be further complicated when an employer is making 20 or more employees redundant within any 90-day period at a single establishment, as the employer must follow collective consultation rules and complete HR1 form that needs to be submitted to the relevant government department before the start of the redundancy consultation process.
Before any compulsory redundancy takes place, employers need to consider bumping, short-time working, job sharing, and alternative employment to avoid redundancies.
Also, having regard to changes in the law introduced from 6th April 2024 where employees who are at risk of redundancy are pregnant or returning from maternity, adoption or shared parental leave, they would have priority status for redeployment opportunities in a redundancy situation.
Clearly, redundancy matters can be quite complex and where employers get the law and procedure wrong, they could then be facing, amongst other things, an unfair dismissal claim. If you require any further assistance, please do not hesitate to contact our HR/Legal advice line team at 0116 274 9193.
