The new normal comes with a staggering number of changes that we all must accept. A routine trip to the dentist will feel a lot different with the necessary temperature checks, face coverings and empty waiting rooms. But needs must with your own safety at risk as well as that of your staff and the patients.
Dental practices are having to adapt to the stricter controls and inevitably this means a reduction in the number of patients you can currently see each day. Reduced patient numbers means reduced income and tighter margins so you should be on the lookout for ways to control costs. Variable costs (e.g. materials / lab bills) should reduce in line with the income so it’s the fixed costs that will need your attention, and one of the highest in that area is employee costs.
With the Coronavirus Job Retention Scheme that was introduced in late March, it’s likely your staff have been receiving 80% of their usual pay while you have been closed. As the practice has reopened you may have brought back the key team members that you can’t live without but what about the rest of the team? Are you overstaffed? Does their position even exist now that you’ve had to adapt? In these difficult times, difficult decisions need to be made and you may need to consider the “R” word… redundancies. Below are some of the key points you need to consider when thinking about redundancies within your team:
Consultation & Selection
Consultation is a fundamental aspect of a fair redundancy process. The idea is to seek the views of the staff on your proposals and for them to be considered with an open mind. Assuming the employees are furloughed it would be appropriate to hold such consultations virtually (e.g. using Zoom). This will be an emotive topic so be prepared for some challenging discussions.
The pool of staff for the selection process should be based on the future needs of the practice. Consider the employee’s skills and performance in their current role and how best that will fit in your post-COVID practice. Be careful you are not swayed by selecting employees with the lowest entitlement to a redundancy payment or those that may be nearing retirement as this has the potential for indirect age discrimination.
Redundancy Notice Period
As with any employment termination, you need to give your employee notice. The notice period should be outlined in their employment contract, but it must be at least the statutory minimum:
- at least one week’s notice if employed between one month and 2 years;
- one week’s notice for each year if employed between 2 and 12 years;
- 12 weeks’ notice if employed for 12 years or more.
There is some debate as to whether notice period can be paid at the 80% furlough rate and you should take some dedicated legal advice before deciding on this aspect.
You will also need to pay for any unused holiday allowance accrued to the end of their notice period.
Statutory redundancy payments are required if the employee has been working for you for 2 years or more. Such payments are paid free of tax and national insurance and must be at least equal to:
- half a week’s pay for each full year you were under 22;
- one week’s pay for each full year you were 22 or older, but under 41;
- one and half week’s pay for each full year you were 41 or older (capped at 20 years).
Employees made redundant after 6 April 2020 have a weekly pay cap of £538 and therefore the maximum statutory redundancy pay, they will get is £16,140 (for those aged 41 and over). However, you can pay an employee as much as you like as a redundancy payment but only payments of up to £30,000 are tax-free if ex-gratia (i.e. a voluntary payment made in compensation for loss of employment – “out of kindness”).
The above points are intended as a brief outline to the redundancy process. As with any situation which could be contentious, we would strongly recommend you engage the services of an employment law or human resources expert before starting such a process.
If you’d like to find out more about how we can help to navigate your practice through the challenging times ahead, please call us on 01872 300232 or email firstname.lastname@example.org.