Redundancy and the UK’s Coronavirus Job Retention Scheme: Key Consultation Deadlines

The Coronavirus Job Retention Scheme (CJRS) will gradually be tapered over the coming months until October 31, 2020, when it will no longer be effective. The CJRS has been a great support to many employers and their employees, however, as businesses begin to reopen and the UK government support decreases, many employers are now faced with difficult workforce decisions—some of which may include redundancies (i.e., reductions in force).

Redundancy-Consultation Timing

There are strict time limits for when employers must conduct consultation meetings with employees. These timeframes are dependent on the employer’s proposed number of redundancies at the same establishment within a 90-day period as follows:

• Employers proposing redundancies on fewer than 20 employees, must conduct consultations within a reasonable time.
• Employers proposing redundancies on 20 to 99 employees, must conduct consultations no less than 30 days before a proposed dismissal takes effect.
• Employers proposing redundancies on 100 or more employees, must conduct consultations no less than 45 days before a proposed dismissal takes effect. In Northern Ireland, employers proposing redundancies on 100 or more employees have 90 days to conduct consultations before a proposed dismissal takes effect.

The gradual tapering of the CJRS is challenging for employers as many are unsure what the future holds and are trying to balance using the CJRS to protect jobs, while being mindful that redundancies may be inevitable. It is important that in strategizing on the best way to proceed, employers remember key consultation trigger dates to ensure compliance with UK employment laws.

Key Dates When Using the CJRS but Redundancies Are a Possibility

The minimum consultation period for 100 or more proposed redundancies in one establishment within a 90-day period would follow the below timeline (excluding Northern  Ireland). The minimum consultation periods for fewer than 100 employees is less (as stated above).

16 June 2020 is the latest recommended date for conducting a minimum 45-day collective consultation prior to any changes to the CJRS taking effect on 1 August 2020.

Starting on 1 July 2020, flexible furloughing is permitted. Further guidance on this topic is expected on 12 June 2020.

Starting on 1 August 2020, employers will be required to pay employer National Insurance contributions and employer pension auto enrollment contributions for furloughed employees.

Starting on 1 September 2020, employers will be required to contribute 10 percent towards the CJRS grant of furloughed employees (subject to the monthly cap of £2,500).

15 September 2020 is the latest recommended date for conducting collective consultations a minimum of 45 days prior to the end of the CJRS on 31 October 2020.

Starting on 1 October 2020, employers must contribute 20 percent towards the CJRS grant to furloughed employees (subject to the monthly cap of £2,500).

On 31 October 2020, the CJRS ends.

Daniella McGuigan is a partner is the London office of Ogletree Deakins.

Carrie-Ann Hopkins is a paralegal in the London office of Ogletree Deakins.