The Redundancy Minefield Michael-Jon Andrews Employment Lawyer Barlow Robbins LLP

1. The Redundancy Minefield Michael-Jon Andrews Employment Lawyer Barlow Robbins LLP

2. Today’s Agenda • Redundancy Defined • Before Redundancies are Announced • When Redundancy Becomes Necessary • The Redundancy Process • Redundancy Payments • Summary

3. Redundancy Defined • Section 139 Employment Rights Act 1996 • "... an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to: • the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased, or intends to cease, to carry on that business in the place where the employee was employed or • the fact that the requirements of that business for employees to carry out work of a particular kind, or for employees to carry out work of a particular kind in the place where he was so employed, have ceased or diminished or are expected to cease or diminish".

4. When Can Redundancy Occur? • Business closure • Workplace closure • Can include relocation • Mobility clauses • Reduced requirement for work of a particular kind • May result from reallocation of duties

5. Before Redundancies are Announced - Analysis of Business • Analysis of all outgoings • Sub-Let or assign excess office/shop space • New lease – rent free period • Energy bills • Supplier contracts • Staffing Levels

6. Before Redundancies are Announced- Initial Options • Not replacing departing staff • Retiring staff in accordance with the statutory procedures • Reducing overtime • Pro-active performance management • Outsourcing – security, cleaning or IT - TUPE • Redundancy?

7. Before Redundancies are Announced- Secondary Options • Is the business prepared to accept volunteers for redundancy? • If so, what is the package on offer? • Attach a condition that the business reserves the right to refuse redundancy if a key member of staff volunteers for it • Consider compromise agreements

8. When Redundancies Become Necessary - Planning • Consider what skills/roles the Company needs post redundancies • Plan your selection process to achieve that aim 2.1 Consider Pool of Selection 2.2 Consider Selection Criteria

9. When Redundancies Become Necessary - Planning 2.1 Consider Pool of Selection • Identify correct group • Consider: • Employees doing similar work • Interchangeable roles • Is the role unique? • How many redundancies?

10. When Redundancies Become Necessary - Planning 2.2 Consider Selection Criteria • Consider carefully the selection criteria , the scoring system including weighting given to any key criteria e.g. relating to future needs of the business • Criteria must be fair and objective and capable of verification • Last In First Out? • Performance – importance of appraisals • Additional skills and knowledge – relevant to needs of the business • Attendance record – beware of absence related to a disability or maternity leave • Discriminatory selection criteria – e.g. related to pregnancy or part-time status

11. When Redundancies Become Necessary - Planning • Produce a timetable • Consider Length of Consultation • Consider Collection Consultation; • S188 Trade Union and Labour Relations (Consolidation) Act 1992 • 20 – 99 redundancies proposed within 90 days or less • 30 day consultation • 100+ redundancies proposed within 90 days or less • 90 day consultation • Notification to Secretary of State

12. When Redundancies Become Necessary - Planning Take legal advice on plan Brief managers and HR officers on what is required of them Designate as far as possible an objective Redundancy Selection Panel and an Appeal Panel (in most cases) – ensure those on each panel are not “tainted”

13. The Redundancy Process • Announcement • ‘At risk’ letter, which includes • Invitation to consultation meeting • Right to be accompanied by; • Trade Union Representative • Work colleague • Avoid definitive language (either orally or written)

14. The Redundancy Process • Individual Consultation Meeting (or Meetings) • Employee has opportunity to :- • Comment on criteria and proposed scoring • Suggest ways to avoid redundancy • Consider alternative employment • Employer to consider: • Vacancies in associated companies • Employee on maternity leave/disabled employees • Refusal of suitable alternative employment • Trial periods • Address other concerns

15. The Redundancy Process • Individual Consultation Meeting cont. • Avoid definitive language (either orally or written) • Advise that employee can have time off to seek alternative employment • Take note of meeting • Applying the selection criteria

16. The Redundancy Process • Second letter – invitation to dismissal meeting • Sets out grounds for considering dismissal – provisional selection for redundancy • Right to be accompanied • Before sending letter Employer to consider if; • basis for selecting individual employee was fair • consultation period has been long enough

17. The Redundancy Process • Second meeting – dismissal meeting • Employer to ; • Confirm/discuss scoring results • Confirm no suitable alternative positions found • Discuss any further suggestions from Employee • Dismissal letter and right of appeal • Appeal meeting and final letter if required

18. Redundancy Payments - Statutory Redundancy Pay • Qualifying service • Relevant calculation • 41yrs and over = 1.5 wks x years of completed service • 22– 40yrs = 1 wk x years of completed service • Under 22yrs = ½ wk x years of completed service • Currently £330 max weekly pay • Insolvent employers

19. Redundancy Payments - Other Payments • Contractually enhanced redundancy pay • Notice pay • Pay in lieu • Taxable? – PILON clause in contract? • Holiday pay

20. Summary • First consider alternatives to redundancy • Volunteers for redundancy/ Compromise Agreements • Plan the process in good time: produce a timetable • Consider redundancy pool and selection criteria carefully • Take legal advice • Consult and follow fair dismissal/appeal procedure • Include employees on long term sick leave/maternity leave • Provide time off to find alternative work

21. Any Questions?