According to a survey of 2,000 UK business leaders - by employment law advice firm BrightHR - 43 per cent of UK business owners are not confident that they could make redundancies according to the law.

The latest Labour Market Outlook states that a third of UK organisations are expected to cut jobs in the next quarter of 2020 - and two in five business leaders are worried about making redundancies over the next 12 months - as the smallest mistake could see them facing employment tribunals and hefty legal penalties.

The survey of small business owners also found that 51 per cent of employers are unclear as to the redundancy process that should be followed during or after furlough. The business leaders feel confused about whether redundancy pay is based on employees’ normal wages or their furlough rate of pay.

Whilst accepting that redundancies will be an unfortunate necessity for many companies over the next year - as a result of the coronavirus pandemic - BrightHR advise firms that they should explore every other option first.

Alan Price - CEO of BrightHR and Employment Law Expert - stated:

“With the UK Government’s Job Retention Scheme winding down and many businesses having to let staff go to cope with changing levels of demand, redundancies are currently an unfortunate necessity for many companies.

But you need to explore every other option first. Because if the worst happens and an employee takes you to a tribunal, a judge will expect to see a firm business case for why you had no choice but to make a role redundant. The tribunal will also want to see that you’ve followed the correct redundancy process. Failure to do so could lead to you making a big pay out to your former employee.”

He added:

“None of this is easy. Contract changes and redundancies are among the most complicated areas of employment law. Therefore, it’s essential that employers either understand the redundancy process or they have the relevant tools and people to assist them with making the right decisions in line with the law”