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Rethinking your staffing requirements to survive the recession

With a new CBI survey revealing the highest level of retail job cuts since the 2009 crisis, lockdown restrictions, a lack of consumer confidence and less spending power continues to hit Britain’s high streets hard. While some businesses have remained resilient and are now back trading under revised conditions, a number of retail heavyweights, including Debenhams and Marks & Spencer, have already announced mass redundancies.

While the furlough scheme has provided a lifeline to struggling businesses, with less than two months until support is withdrawn, coupled with the growing impact on the economy and fears of a second wave, more retailers will be forced to contemplate a shake-up of their staffing requirements and structure in order to survive the winter months.

Streamlining your workforce is often a necessary business decision, especially during a recession, but any changes will have employment law implications and need to be executed carefully. So, what do employers need to know about amending employees’ terms and conditions, and what is the right way to approach redundancies if this becomes the only option?

Making changes to employees’ hours, place of work or pay

Though latest Springboard data shows promising signs that retail footfall is picking up, demand is unlikely to return to pre-crisis levels immediately. It may also not be a linear recovery, as footfall dropped slightly around the time face coverings were made mandatory in shops.

Retailers will therefore need to be flexible, ramping up or scaling back their staffing requirements in response to fluctuations in demand. Ongoing social distancing measures may also necessitate adapted workforce arrangements.

Will you need to make changes to start and finish times to comply with your risk assessment, perhaps redeploy some employees to other roles or locations, or cut hours or pay due to the financial impact of the crisis? Will these changes be temporary or permanent? If so:

  • Document your decision-making so that this can be used to support any processes that result from your planning.
  • Keep in mind that changes to working arrangements may need to be reflected in employees’ terms and conditions. For example, asking people to work different shifts, perhaps with a later start and finish time, could involve a contractual change.
  • Note that a contract can only be changed in line with its existing terms or by agreement, so start by checking what it currently says. If what you are trying to achieve is already permitted under the terms of the contract, the change can be enacted that way. If not, the quickest and easiest way to introduce a change is by negotiation and agreement.

Going down the redundancy route

Redundancy is always a last resort, but in the current climate it may be a necessity. At Ellis Whittam, we are currently dealing with four times the amount of redundancy queries compared to pre-COVID times, and CIPD research showing that retail is one of the sectors where employment confidence is lowest.

Redundancy is a particularly complex area of employment law and employers must follow a fair procedure. Processes vary depending on how many employees are at risk; however, some broad principles apply universally, including the need to:

  • Put together a water-tight business case;
  • Provide adequate advance warning;
  • Devise a fair pool for selection;
  • Consult with staff (individually or, if you are proposing to make 20+ redundancies, with employee representatives) in an attempt to find alternative solutions;
  • Create and apply objective and non-discriminatory selection criteria;
  • Consider, discuss and offer suitable alternative employment if available; and
  • Make appropriate redundancy and notice payments subject to statutory requirements (if no alternative/higher contractual arrangement exists).
  • This is a complex process and the margin for error is high, so it is best to seek advice to avoid inadvertently leaving the door open to unfair dismissal or discrimination claims. Fortunately, there are plenty of resources available, including the free Coronavirus Advice Hub and our upcoming webinar.

Success for retailers right now will hinge on your business being suitably safe and appropriately staffed. With the end of furlough in sight, now is the perfect time to pause for review; have you planned the structure of your workforce in the longer term? If not, mapping out your survival strategy and how this translates on a staffing level could be crucial to future-proofing your business.

Laura Chalkley, retail employment law expert and solicitor at Ellis Whittam

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