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Friday, 24 July 2020 15:19

Zero-Hours Redundancy Conundrum

It’s no secret that redundancies are on the rise. As the Government’s furlough scheme begins to be wound down, some employers are finding that the prospect of paying just the National Insurance and pension contribution of their furloughed staff will be too big a cost burden to bear. Consequently, the number of jobs being shed is likely to rise further.

The word “unprecedented” has been in almost constant use during the pandemic to describe the unending wave of new situations and circumstances that we have been confronted by. The furlough scheme, a new concept in itself, has raised its fair share of hitherto, unheard of circumstances and scenarios. Combined with the redundancy situation, we have yet another one....

With the economy and therefore employment, being in such a good place prior to Covid-19, redundancies were few and far between. Zero-hours contracts were relatively new also, and so the idea of making a worker on a zero-hours contract redundant wasn’t ever a consideration; particularly as this would have gone against the very point of having a zero-hours contract in the first place, ie. if there is no work then none is offered, and no pay is due.

Now, as employers look to save costs by making jobs redundant, probably for the first time, zero-hours and casual workers will have to be included in the process.

There is a moral dilemma in making zero-hours staff redundant as well as a legal one. Zero hours and causal workers still accrue rights after all.

The furlough scheme includes zero-hours and casual workers, and pays either an average of workers’ earlier pay or the highest single amount earned over a previous period. Therefore, there is potentially a not insignificant redundancy payment to be paid to redundant zero-hours contract workers as calculations are usually based on the previous 12 weeks earnings.

Strictly speaking, an employer could avoid paying the redundancy payment by bringing his zero- hours contract workers off furlough and then simply not offering them any work. But in some circumstances that doesn’t seem fair and we think it’s potentially open to a Tribunal claim as it might be argued that those workers should have been offered redundancy.

We think the safest approach is to put at risk all employees who fall into the redundancy pool, regardless of their contract type. So for example, if you have a team of ten cashiers made up of five full time and five zero hours staff, (so that you could call on the latter when you expected to be busy), then all ten should be put at risk.

Equally, if you have just a few or a single zero-hours position that bears no similarity to any jobs that are being made redundant, then you may be able to justify bringing these employees back on their zero hours terms.

Whilst the above is sound guidance, as with most issues that have arisen from the Covid crisis, it is best to look at each on an individual basis. So if this raises any questions or if you have doubts about your own situation then we’re available on 01452 331331 or by e-mail at This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Read 122 times Last modified on Friday, 24 July 2020 15:44

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