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Redundancy Following Furlough

Reasons to choose Wilson Browne

Lockdown restrictions are easing and with more people returning to work, furlough will eventually be coming to an end.

Right now the future remains uncertain for many businesses and employees alike.

COVID has taken its toll in terms of demand for many goods and services, and some jobs may simply not exist in the same form that they did before due to changes in how businesses operate or because of other external factors.

Businesses will need to think about the next steps for moving forward and whether it is viable to continue as it did prior to lockdown. In the current economic environment, it is difficult to know how a business may be affected and it will need to think about a number of factors.

It is, however, a generally held view that the headcount reductions already reported in the press will be a continuing theme for many for some time to come. This might be as a result of either/both a redundancy exercise and/or re-organisation. Other actions potentially open to businesses to consider are:

  • wage freezes/salary reductions;
  • changes to benefits offered as part of the overall salary package; and/or
  • a more proactive approach to the use of performance improvement plans than may have previously been the case

Adopting any one of these options potentially leaves the business open to a claim risk. Therefore, whilst it is not a substitute for a proper process, settlement agreements can be a useful tool to reduce these risks thus leaving management to focus attention on the strategic direction of the Company at a time when it is most needed. They can also be structured in a variety of ways which brings a benefit to both the employer and employee alike.

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