The bigger picture: dismissals via Zoom

There has been some criticism around a boss of a US firm who fired around 900 of his staff on a single zoom call. Vishal Garg delivered the news to his colleagues that the firm were making redundancies due to the market, efficiency and performances and productivity. It has been commented that the approach was “cold, “harsh” and a “horrible move” given the dismissals took place on the run up to Christmas.

Mr Garg has been criticised for his “lack of empathy” towards staff and his callous manner in which the process was conducted with no prior warning to employees. Further, in a very uncertain time demonstrating a sense of empathy towards employees is now more important than ever.

Observations

We recognise that employers sometimes do have to make job cuts and that is, unfortunately, the harsh reality of the situation. But the way businesses approach redundancies is key to try and help employees deal with such shocking and devastating news. Redundancies carried out in the manner that this one was carried out in would not be accepted in the UK. It is extremely important to recognise that it can also do more harm than good for an employer in the long term from a reputational perspective if they are seen to dismiss employees in such a callous manner.

Communication is key in collective consultation processes

It is important when carrying out redundancies to carry out a collective consultation process where there are proposed redundancies or 20 or more staff of a transfer of business (known as TUPE). If the employer recognises a trade union at the workplace, consultation must take place with them. Otherwise, the employer must consult with other employee representatives – either through a standing committee which is authorised for this purpose, or via a staff election.

In redundancy cases, the consultation must take place over either:

• 30 days (for 20-99 job losses); or
• 45 days (for 100 or more).

The representatives must be provided with a specified list of information in advance of consultation. Breach of such requirements in UK law can lead to claims for failure to inform and consult. In a previous case, up to a maximum amount of thirteen weeks’ salary per employee has been awarded, which can prove very expensive for the employer. There is also helpful ACAS guidance on how to manage staff redundancies which can be accessed here.

Communication is therefore crucial in any redundancy exercises with that being the key to consultation. Businesses should also explore other avenues and alternatives other than jumping directly to a decision to make redundancies. Around Christmas time especially, it is a very poor time for individuals to look for and secure a new role especially with the pandemic which makes things more difficult in general.

Risk of potential claims

There is also the risk posed to employers of employees bringing an unfair dismissal claim if they believe they should not have been redundant, or for failure on the part of the employer to carry out the process correctly. Redundancy is one of the five fair reasons for dismissal, but it must fall within the statutory definition. Further, the selection of employees for redundancy must follow a fair procedure.

There is also the risk of potential discrimination claims in respect of the selection process if this was determined on one of the protected characteristics (i.e. age, race, gender, religion, disability, pregnancy, sexual orientation). There is also an ongoing consultation which is looking to afford more protections which will prohibit redundancy during pregnancy and maternity leave and for six months after the end of the pregnancy or maternity leave, except in specified circumstances if the Pregnancy and Maternity (Redundancy Protection) Bill 2019-21 is passed, so watch this space.

Differences between US and UK employment law

The main difference is that in US employment law employment is referred to as “at will” employment. This means that employers in the US can terminate an employment relationship without notice for any reason, with the exception of for a “protected class”. Which is the equivalent of protected characteristics in UK employment law (i.e. age, race, gender, religion, disability, pregnancy, sexual orientation). UK employment law therefore has more of a process where employment is structured through formal and written contracts which deals with a UK employee’s conditions of employment. Further, in the UK there is often a requirement for notice prior to termination. And an employer will often to need to show the reason for dismissal which is not the case in the US.

Therefore there is much more protection for employees in the UK than that in the US.

Summary

This case certainly demonstrates extremely bad practice on behalf of the US company and serves as a useful reminder of how not to carry out redundancy processes. It is important to recognise that legal issues potentially may also not stop at the consultation process. For example, if any employee did not agree to a recording of the Zoom meeting where redundancies took place, this could be in breach of the implied duty of trust and confidence which is in every employees’ contract. Further, if another employee accidentally joined a Zoom call where another employee was being made redundant, this could be a criminal offence under section 3 Investigatory Powers Act 2016. So the book simply does not stop at the process in which the collective consultation is carried out. There is a lot more to consider, as well as employees mental health and wellbeing more generally.

It is therefore key that employees understand their obligations for employees to fully understand the scope of their rights. However, that is not to say that as an employer you are unable to make redundancies. If there is a genuine business reason to cut costs down, relocation of the business or because the work the company does is no longer required, if you can show you have a legitimate reason for making redundancies then you are on safe grounds.

Disclaimer

• Please note – this guidance is not intended to be taken as legal advice. For individual situations you will need to take specific legal advice.
• The information in this guide is correct as of 9 December 2021.

We hope you have found this note useful and if you do have any queries please feel free to contact one of our experienced solicitors or mediators on 0113 3229222 or email us on enquiries@consilialegal.co.uk.