Case Study: Falling Demand & Covid-19

The Client
A small, successful design and production company (approximately 20 employees) which had to move premises to save costs amid falling demand for its products as a direct result of Covid-19.

The Challenge
The business had been hit hard by Covid-19. Many of the regular large orders it had been expecting had either been cancelled or postponed for at least a year and so to save costs it had to move to smaller premises. As a result, there was a need to review the way the business worked and consider stopping some aspects of its production work altogether as demand had dried up. They needed to save some staff costs. The Company Secretary contacted Cherington HR for guidance on the redundancy process.

The Solution
Helen Astill provided them with written instructions and template letters so that they could follow a fair process. The Director wrote to all staff (some of whom were furloughed) explaining the situation and that there was a proposal to cease some aspects of their work. He then arranged to speak to each employee in that team individually to explain the situation and consult with them. Having made savings where they could, they had concluded that they needed to consider removing ~ 3 posts. One employee who had been off on adoption leave decided not to return and resigned. The director then met with each of the other employees in the affected areas and discussed the selection criteria being proposed. Having had feedback from those discussions, the employees were scored against a skills matrix for those elements that they were going to need in the future. He then invited the employees to another consultation meeting where he discussed their provisional scores and whether that meant that they were likely to be successful in being retained or not. Queries and responses to suggestions from staff were addressed as part of the process. Some discussions were had about alternative work that could be done. The Director then met with the staff one final time to let them know the final outcomes of the scoring and therefore which members of staff were going to be issued with notices of redundancy.

The Results
Only one employee appealed the decision, but her concerns were more about timing of the redundancy payments so that they did not affect her benefits and those were addressed in discussion with payroll. Feedback from the Company Secretary was, “Thank you – your help has been invaluable!”

Key words: Furlough; Redundancy; Covid-19; Consultation


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