Making cuts

Redundancies are still occurring within salons for a variety of reasons. Some owners tell me it’s the costs associated with the new living wage, some refer to a drop in client demand following Brexit and others say increasing competition in the high street is to blame.

When you decide you may have to reduce the number of hours or a service in your business you should consult with staff rather than presenting them with your decision, explore all alternatives before selecting candidates for redundancy and then elect objectively, using legal criteria that can be defended. There are inevitably tricky situations that can arise. Here are just a few that I’ve advised on over the last few months.

1. What happens when an employee has been given notice of redundancy then gets offered another job?

You could agree that the employee leaves early – for example, working three weeks’ notice rather than six – and receives their redundancy payment. Alternatively, you might require them to work their entire notice and write to confirm that if they leave earlier they would lose their redundancy payment. The employee would have a right to pursue a claim for the payment at an employment tribunal.

Realistically, the employee has been told their job doesn’t exist anymore and has the chance of a new job, so it’s unlikely there’s an overwhelming case for them to work the balance of their notice.

2. Why can’t I just pick the cheapest option and let the newest person go?

Firstly, your newest employee might be your top performer; secondly, it can often be seen as age discrimination if they are the youngest; and, finally, you can’t just pick someone.

You must consult with the staff potentially affected to allow them to volunteer or find an alternative to redundancy. If a solution can’t be found, you must select based on performance criteria such as average column income.

3. Can pregnant staff be selected for redundancy and do they lose their right to maternity pay?

It is a myth that pregnant staff can’t be made redundant but obviously there are additional risks and you should be certain you can demonstrate the selection is not related to the pregnancy.

I would question whether it is cost effective for you. The employee might be just about to go on maternity leave for up to a year, so you will be saving their wage costs anyway. Then they may not return, or may return part time. However, if they are within 15 weeks of the baby’s due date they would still be entitled to maternity pay from the employer (who reclaims the costs).

4. What about redeployment of staff who are on maternity leave and can’t immediately take up the new role?

Involve them in the consultation process. An employee on maternity leave actually has priority over other employees for redeployment opportunities. This is a rare example of lawful positive discrimination.

5. Do older workers get more redundancy pay?

Yes; if an employee is made redundant then the payment (after two years’ service) is based on their age. Under-21s get half a week’s pay for each year of service, 21 to 40-year-olds get one week’s pay per year, and after 41 its 1.5 weeks’ pay. The weekly pay is subject to a maximum. From April 6, 2017, this is £489.

Getting it wrong

In December 2016, a therapist was selected for redundancy and took her case to employment tribunal, claiming unfair dismissal and sex discrimination.

She’d worked for 10 years but rarely worked weekends. Her bosses then asked her to change her shift pattern.

She refused and was dismissed. She claimed she was unable to get childcare at weekends and that her request for flexible working had previously been granted.

The employer unsuccessfully argued that she had been made redundant and there was no sex discrimination. She was awarded £10,399 for being unfairly dismissed and £8,000 for injury to her feelings. This looks like a case where redundancy was used to tackle an entirely different issue.