Dealing with Covid and redundancy

Warrington solicitors DSM Legal have seen an increase in enquiries from employees wishing to bring an employment tribunal claim against their employer as a result of being dismissed due to Covid.

Diane Massey employment solicitor at DSM Legal says; “There is no doubt that many businesses, not just the hospitality and retail sectors, have been badly impacted by the pandemic.

Whilst there has been some financial support from government, such as the furlough scheme and the self-employed income support scheme, some businesses have not been eligible for grants and have had to take out loans to tide them over.

Unfortunately, however, the effects of the pandemic continue and many businesses are having to look at ways of reducing overheads to ensure that the business continues to remain sustainable. This can mean making the difficult decision to reduce staffing levels.”

Some of the options available are to dismiss an employee on the grounds of redundancy or for ‘some other substantial reason’ for example, commercial/economic reasons.


Examples of when a redundancy may be necessary include: :
• If company is closing down or moving premises.
• There is a need to cut costs.
• The job role no longer exists.

The legal definition of a redundancy can be found in the Employment Rights Act 1996.
Useful information can also be found on the ACAS website at

Employees are entitled to the statutory redundancy payment if they have been employed for two years or more continuously.

Possible Alternatives

An employer should consider whether there are any alternatives to dismissing a member of staff. For example, reducing their hours or introducing a pay freeze may be a preferred options for both parties, although consultation with affected employees should always take place before any decision is made to change terms and conditions of employment. A decision to unilaterally alter an employee’s contract of employment may result in a claim being brought for breach of contract.

Redundancy procedure

If redundancy is unavoidable the correct procedure must be followed. All affected employees should be given as much warning as possible and an explanation for the need for redundancies. Once employees at risk of redundancy are identified they should be invited to one or more meetings at which the selection criteria (which must be objective) and the scores are discussed.

It is important that employees’ representations regarding their scores are considered and any discussions as to how to avoid dismissal take place, including offering any suitable alternative employment.

Once all alternative avenues have been exhausted and the decision to make an employee redundant is made, the employee(s) must be notified that they are to be dismissed. The employee should always be given the right to appeal against the dismissal. Appropriate statutory redundancy payment and all contractual payments should be calculated and paid.

Failure to follow the correct procedures

Failure to follow the correct redundancy procedure can result in an employee claiming compensation for unfair dismissal in the employment tribunal. There will be legal costs for an employer associated with bringing and defending such claims even if the claim does not succeed.

Sometimes an employer may wish to avoid the redundancy procedures, perhaps to save time and money, or may have inadvertently breached them.

Some other substantial reason

This can apply to a number of situations but is not a substitute for a genuine redundancy situation.

In circumstances where an employee is being dismissed consideration should be given to whether it is appropriate to enter into a settlement agreement with the employee to prevent any claims being brought following the dismissal, such as unfair dismissal (if an employee has been employed for a year) or discrimination (for which no minimum length of service is required).

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