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COVID-19 – HR impact on businesses

In these unprecedented times, businesses are facing significant financial impact with income in some cases reducing to by 75% overnight. Industries impacted include events, hospitality and travel.

What steps can your organisation consider to ensure the financial viability of your business during these uncertain times, particularly in relation to staff which in many cases is the business’ most significant asset? How can you reduce staff costs but maintain a balanced workforce?

There are a number of steps to consider, when considering dealing with the management of staff with a significant reduction in income:-

  1. Discuss with staff whether they would be prepared to take an unpaid sabbatical. That way, when the virus has plateaued staff are able to return to their jobs to ensure that the business can continue running. This cannot be imposed on staff as this may amount to a breach of the employment contract.
  2. Some contracts of employment may include a specific “lay off” provision which allows employees to take a period of unpaid leave. If it is not included in the contract of employment then this cannot be imposed unilaterally.
  3. Consider whether individuals would be willing to reduce their hours or agree to a reduction in their salary. Again, this helps with preserving the employment status of individuals during a period when the income for businesses is significantly reduced. Again this cannot be imposed and to do so may result in a breach of contract.
  4. Request staff take holiday. Under the Working Time Regulations, an employer can insist a worker takes annual leave at a particular time provided it gives twice as many days’ notice as the number of annual leave it wants the individual to take. You can insist on this, provided you give them sufficient notice.
  5. If the financial situation is extremely precarious, then you can consider redundancies. Please note that if you are making more than 20 individuals redundant in one location, within a 90 day period you will have to enter into collective consultation. The main points to highlight with collective consultation is: a 30 day consultation period and election of staff representatives.

It is essential to have a committed workforce to ensure that you can ride this storm. Communication and finding ways to resolve issues collectively with the workforce will undoubtedly help.

If you have any questions, please do not hesitate to contact Sejal Raja at sejal.raja@rlb-law.com.


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.

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