Anna Denton Jones, Refreshing Law Ltd.
Includes updates on company reorganisations and what employment law to be aware of when having to make staff redundant and shuffle around departments.
2. navigating employment law
Factors
• Pace of change
• People have been through this before
• People watch how you treat
colleagues…..even if they aren’t affected
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Dressing something else up as
‘redundancy’
• Misconduct
• Poor performance
• Sex discrimination
• Lack of management commitment to investing
time and energy into something
• A dismissal because someone has raised
concerns
4. navigating employment law
X v Y Limited
• Disabled employee
• Performance problems
• Overhead pub conversation
• Email leaked
• Justice Slade – process used as a ‘cloak’ to
dismiss employee
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What do we consult about?
• UK Coal Mining Limited v NUM 2007 - There is
a duty to consult over the reason for making
the redundancies in the first place
• s188 TULRCA 1992 The consultation shall
include consultation about ways of
– Avoiding dismissals
– Reducing the numbers of employees to be
dismissed; and
– Mitigating the consequences of the dismissals
9. navigating employment law
Risky things employers do
• Forget that a contractual harmonisation
exercise, relocation or one seeking to reduce
pay eg:- all reapply for your jobs is still a
potential redundancy exercise, even if no-one
actually needs to leave
10. navigating employment law
Other risky things employers do
• Not keeping those on the long-term
sick/maternity leave involved
• Not involving zero-hours workers in the
consultation
• Selecting those on FTC or part-timers
contracts first or not including them in
consultation process
• Personalising information to employee
representatives
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Other risky things employers do
• Start putting a reorganisation into effect
before the process has been finished
• Go for the employees who TUPE’d in rather
than across the staff
• Advertising new roles
• Policy of not re-hiring anyone who takes
voluntary redundancy – may be indirect age
discrimination?
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Other risky things employers do
• Rushing
• Picking off certain roles before main exercise
• Failing to set out in writing how the
redundancy payment has been calculated –
this is a criminal offence
• Assume that once it has given notice it can
change its mind
13. navigating employment law
Redundancy where parental leave
• Timing of redundancy
• Regulation 10 MAPL Regs 1999
• Strength of case law: Sefton BC v Wainright
• Same applies Adoptive Leave, Shared Parental
Leave
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Settlement agreement – gagging
clauses
• Trend – you can’t talk about:
– Fact of agreement
– Terms of agreement
– Background to it
• Employee needs to be able to talk about
something to future employers/their family
etc.
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Right to reasonable time off during
notice period to look for work
• Paid
• No case has ever found that it was
unreasonable for the employee to take the
time off
• Limit on the amount you have to pay to 2/5ths
of a week’s pay – employee may not
understand that when your letters said they’d
get ‘paid’ time off!
19. navigating employment law
Work picks up again
• During notice period……offer position
• After gone – offer position if during 3 month
window to claim unfair dismissal?
Anyone who has come along expecting me to do a how to go about a reorg session – you’ll be disappointed – you can all read Hrinform yourself….I have chosen to focus on the pitfalls and things that I see organisations getting wrong. I have acted for hundreds of individuals overs the years…learn how they feel and share the things they get most upset about.
Hear from Pat later re coaching people through change – why building in resiliience more important than ever.
Reorgn fatigue – anyone in NHS? TUPE’d in and out and in and out and on again?
People are savvy – they have access to the internet, they know their rights, they can spot unfairness a mile off: employers cannot get away with things that maybe they used to?
People watch how you behave to colleagues: pointless spending hours and money on engagement and then treating people badly – undo all your good work
Recently dealt with a ‘redundancy’ where really my client was too scared of the employee to tackle their misconduct – had already been a car park altercation.
I see the about the number of women who ring me when on ML to day their post is being made redundant:
How can employer say no work when not in work at the moment?
Often pool of when when work in pool of 7-8 people
Person covering is making an impact – employer decides want to keep them on – is not a redundancy! Proposal to change law to ban employers for doing this for 6 months post birth…………..
Lazy option, easier sell, blame something else not the person etc. Recent example early termination FTC saying no work then once employer had given notice decided lots of things they needed the employee to finish off and would take a number of months to do it – that isn’t a redundancy then is it?
All the ET cases I am dealing with this year have a w/b element – way for someone to get beyond the cap on damages – very broad reach – I’m going to be running training in the new year on that.
Type 2 diabetes
Sleep apneoa
27 years service
Had previously brought DD claim.
Had applied for promotion – not successful.
Concerns about his work going back to 2011.
Months before dismissal in pub – overheard discussion that opportunity to manage out by reason of redundancy – 24 hour contactability/remote working challenges
2016 redundancy round – he was in this process.
2017 email leak solicitor advice ”a wider reorganisation and process at play that we could put this redundancy into the context of”……
Not advice on fair selection criterion – instead how the redundancy can be used to get rid of him when ongoing disability allegations.
Legal professional privilege – not protected if iniquity – discrimination such a serious matter crossed the threshold – finding that this was, even thought marked “legally privileged and confidential”
Importance of planning, having all documents pre-prepared but securely stored in draft, small reorganisation over 60 permutations of letters. Have a non-HR lead for the project – more successful? Take PM approach. You won’t have time to be doing anything else. People aren’t going to just take home a letter and then not come back with loads of questions. Checking contracts for everyone – how many times am I told someone has 1 months’ notice and then their contract is found and its 3 months? Or everyone had new contracts in 1998 except this one person who stayed on the old one? Treat is a logistical exercise: get that person in the team who is really good at detail to be all over this.
Managers need to understand the time frames and that delays at the outset will have a knock-on effect eg:- company planning to relocate on 1st August. Over 120 staff involved so 45 day consultation period, 12 weeks notice period, 1 week for having elections for staff reps because no TU – 5 months at least! Even if single redundancy – fair procedure at least 2 weeks.
Used to be easy – we used to get everyone in the canteen, make an announcement and then send a letter to the lady at home on ML – now staff have been known to tweet from inside their redundancy meetings! Think about how communications to the outside world to be handled. Chief Exec on slack talking to staff – will be getting questions, answering off the cuff – brief all managers not just the ones in areas affected?
Consider if you have got employee reps already in place to consult with in the case of collective consultation or do I need to build in election process in which case will need nomination forms, ballot box, outcome letters etc. Factor in at least 1 week-10 days for doing this.
Confidentiality (gather in notes from meetings, password protect docs, keep letters off site/secure).
Managing the human element – recognise that there are lots of emotions that will surface: denial, concern about friends, concern for the business going forward, etc – be prepared for insensitivity eg;- even the most skilled make find it hard to make the announcement or sound genuinely concerned when what they have been told to say is scripted. Neuro science explains that – 2 circuits in brain. They will go off script and you will have to be prepared to clarify things. Recommend things like FAQs for managers issued at start so they know how to keep “on message”
What will the strategy be for the people who are left (survivor guilt, envy of redundancy packages, resentment if they wanted to go, disagreement with strategy, confusion, exhaustion, uncertainty picking up new tasks, lack of faith in organisation: need clear leadership and direction. Has any resource been put into that end of the equation? Training?
Looking after yourself too!
Why does the law require employers to go through this stage in any process? Contract Change, reduction in headcount even 1 person
Effective mechanism to achieve dialogue
Improve the quality of decision that is made; get to the right outcome. 2007/2008 lots of workforce agreements to reduce working hours and save jobs overall – meant employer didn’t lose the skills they needed and saved cost in l/r retraining people when work picked up
Take the workforce with you through a turbulent time : timing so important – early doors before all the decisions made – often too late for effective consultation?
Reps – make more efficient so not having to try and speak to 100 employees all at the same time
It’s not just Anna telling you have to go through hoops……….
Concern then when ‘sham’ exercise – discuss my experience in England, employee rep training
Completely defeats object what we spend our time doing telling employee’s their voice is important if ride roughshod over it
NUM Case EAT has changed the law in a major way. For example, Securicor Omega Express v GMB 2004 stated no requirement to consult on the business decision itself
It isn’t open to you to argue that “it wouldn’t make any difference” - Middlesborough
ACAS highlight other issues you should consult about including:-
transfers or downgrading
Selection processes
Travel arrangements or expenses for relocations
Notice periods
Alternative employment
If you consult about the way in which you propose to conduct the exercise eg:_ the selection criterion and TU agrees – hard for them to criticise later!
Top tip: set easy topics on agenda for early consultation to set habit of reaching agreement, build in some flexibility in package/process for the reps to “win” some concessions .
Recently saw an organisation go out to staff first – offer period in which could go for VR. Recently taken over by bigger organisation. Staff morale really bad – needed to lose 31 people – got over 100 volunteers. Then you are left with having to do a selection process anyway. Even if you say we reserve the right to decline any volunteers based on org need – bad taste in mouth as then seen as just following unfair process?
Also seen employers with generous ERP go for VR and be swamped – people concerned generous ERP wouldn’t be available in future so go now.
Talent drain. Destabilises the workforce.
Have known someone who went for VR 15 years ago – declined – still talking about it now – once people have made their minds up disenchantment?
Wrong people put their hands up? The poor performers know they are going to struggle to get a job somewhere else on the same salary so won’t volunteer?
Has anyone had bad experience of volunteers?
What’s wrong with this? Less favourable treatment = discrimination – disability, pregnancy related etc
Also breach trust and confidence – if you come back and find your JD has changed, role significantly different etc – sounds obvious but you’d be surprised how many times I hear from people about this.
Still got same obligations to consult
Just because they have been off doesn’t mean you can impose changes on them contractually!!!
ECJ case – consultation obligations apply workers not just employees – thus if changing terms/reorg would affect your zero hours people – involve them in the consultation. None of this ‘they are zero hours so they don’t count’ attitude I get – can still bring UD claims!
If going for FTC/PT because of their status as such = breach of the PTW Regs/FTC Regs – focus instead on the work that is ceasing and diminishing and be lead by that to determine pools.
S188 duty to discuss with employee reps which posts are likely to be affected, numbers etc – doesn’t extend to the who – Data Protection implications when start drilling down further…..take care.
In the last month have been dealing with head of IT where he could see clouds gathering on horizon, took advice early, employer started excluding him from meetings and cutting him out of the loop before even proposal to him or others – risk? CD claim? Undermines the process before you even begin – can’t then rectify.
Kvaerner Oil & Gas Ltd v Parker and others [2003] UKEAT EAT held that the employer should have included both sets of employees not just new ones if do same thing – likely to be automatically unfair dismissal.
In the case of Morgan, in which several candidates were in a pool for potential redundancy, it was considered reasonable for the employer to open up the new vacancy to an internal competitive interview process. It was stated in that case that:
"Where, however, an employer has to appoint to new roles after a re-organisation, the employer’s decision must of necessity be forward-looking. It is likely to centre upon an assessment of the ability of the individual to perform in the new role. Thus, for example, whereas Williams type selection will involve consultation and meeting, appointment to a new role is likely to involve, as it did here, something much more like an interview process. These considerations may well apply with particular force where the new role is at a high level and where it involves promotion."
However, reasonableness will be judged according to the particular circumstances and it is worth pointing to an EAT case which went the other way (Martindale). In that case the EAT held that a tribunal had been entitled to conclude that opening up the vacancy to internal advertisement was not reasonable. I have a case at the moment – really it’s about the poor performance of the sales person. Making his role redundant and then creating two new roles. The package being offered doesn’t suit the inflated expectations of the person in post (shares so in his head worth £90k even though in fact never worth anything). So he’s putting himself forward for the new positions. How do we then reject him? Law will expect us to slot him in.
Not cases which considered external candidates but it is arguable that the considerations would be similar if not the same.
I agree that the alternative employment may not be suitable if it involves a promotion/a role requiring greater skills. However, you will be aware that it will be possible for an employee to challenge that assessment so care should be taken. Test assumption that couldn’t be trained into the role. If the employer decides that the employment is not suitable, it is not obliged to offer it under the statutory scheme. In that case, it becomes easier to open out the vacancy to external competition.
I do not think a decision to advertise externally for a role which is not a suitable alternative in the first place could be said to give rise to CD . In those circumstances: employer is not acting in a manner which is likely to breach trust and confidence; if it could be said to have that effect, such behaviour would probably not be without reasonable and proper cause.
Irish bus driver case – won argument indirect age discrim as more older workers volunteer c.f statutory rules – public sector
The importance of individual consultation- Williams v Compare Maxam ingredient to fairness
You will get people who go on the sick when put at risk. There will be delays – the timetable you have in mind will go awry – go with it.
If an employee refuses to attend meetings, the employer should ask why that is the case. Depending on the employer’s reason for refusing to attend, it may be appropriate to use an alternative means to undertake the consultation, such as undertaking the process in writing.
If an employee refuses to attend due to an alleged shortcoming in the process, the employer may need to consider addressing that allegation and then invite the employee to the meeting/rearranged meeting.
If an employee continues to refuse to participate then the employer can warn that the meeting may proceed in their absence and any decisions will be made without the benefit of the employee’s input. If the meeting then proceeds in the employee’s absence then it should be accurately recorded and a copy of the minutes sent to the employee as part of the ongoing process.
In general, the employer should be wary of jumping quickly to a negative conclusion about the employee’s conduct and should make every effort to discuss the position with the employee and seek to have a meeting with them where possible. There is an analogy here with meetings that take part of a disciplinary process in relation to the fairness of a dismissal. Recent example client had employee not turn up on day 1 meeting – by day 5 lost the plot trying to arrange when he could come for a meeting and just went ahead and issued notice.
Apply my how is this going to look in a year’s time test
Cherry picking – can look really unfair to employees, risk numbers add up in 90 days to more than 20 and trigger collective consultation obligations for later waves
Surprise how many times I see employees with redundancy letters where they don’t know how the payment has been calculated.
Legally once given notice – binding – cannot unilaterally revoke it – need agreement of the employee. Have had cases where employer has changed their mind and said alternative employment offered – Judge went with the employee entitled to say enough is enough and claim their SRP. Recent case employer misjudged work need employees to do before they left – need employees to agree extension, cannot force it.
If the redundancy situation genuinely arises during the ML or PL or AL period – note I have said genuinely: duty to look for alternative employment will arise at that point in time, once the scoring in a pool has been done, ignoring the fact person is absent when scoring them. If selected then reg 10 kicks in.
Discretionary – extend to end of leave period when might be more opportunities.
We all know if redundancy during ML – first dibs on alternative employment. But what about where others also displaced?
W was Head of Overview. Male colleague Head of Member Services – 2 posts go – one new position Democratic Services Manager.
How many of you would say both of them should be put in line for DM and then interview? That’s what employer did – he was successful.
She claimed automatically UD and SD.
Employer argued until restructure complete right to special treatment not engaged
EAT absolute right – kicks in when role redundant, she should been slotted in without any interview so long as was suitable – right lasted until her notice ends.
Difficult sell to the other people in a pool, that they have been beaten by someone who isn’t even around at the moment.
If more than one ML and only one vacancy – would have to have fair selection - not just the one who was returning soonest.
Client who having told employer about their stomach cancer was informed by manager in a room in the middle of a customer premises so she had to walk out in tears past everyone. Please don’t just discuss with line managers the steps they need to take – discuss with them the things you or I would take for granted – the totally obvious to prevent this happening.
Tarbuck v Sainsburys employee who had been on long term sick was at risk of redundancy, she was given priority for vacancies but she argued that caused her more stress so she was taken off the priority list, when she wasn’t being given jobs she complained again so they put her back on. She was offered a 3 month assignment which she rejected before she was made redundant. She alleged a failure to make RA and lost – EAT held no obligation to create a post specifically for the disabled person in a redundancy situation.
But case affecting engineer - kept on pay of his role when given role crossing London supplying other engineers with parts – never told temporary adjustment - later decided over paid and ET found would been RA to keep him on his salary.
The answer will depend on whether the employee genuinely has two separate employment contracts for two separate jobs, or merely performs two roles under one employment contract.
If they have two separate contracts it should be possible to terminate one contract by reason of redundancy and pay redundancy pay based on that contract, while leaving the other contract unaffected.
However, if there are two roles falling under the one contract, the loss of one of those roles, and the loss of hours and pay that goes with it, will require a change to the employment contract. Such a change will require consultation and the employee's agreement, and this would not normally give rise to a statutory redundancy payment because there is no termination of contract.
If the employee refuses to accept the change, the employer would have the option of terminating the contract (following a fair consultation) and offering the employee a new contract that only encompasses the remaining role. This would arguably be a potentially fair termination for redundancy or if not redundancy, then some other substantial reason.
We spend so much time talking about engagement then treat people we are exiting really badly and wonder why staff surveys are negative…..people watch what is being done
‘Would you treat your best friend/brother like this?’
Duty of care to the person who is going….understand why eg:- PC 3 years ago, I am still in touch person who went, complete lack of explanation from company means cannot move forward.
Outplacement consultancy – more and more important - relatively small cost but massive impact – Donna helped one of my client’s who disclosed non-visible disability and was sent home – DWP referred her to me, she had been offered 1 months’s pay, main breadwinner, confidence rock bottom at very difficult time in her life – few sessions with Donna and got dream job. For the sake of a months salary or so – huge impact.
Legal fees – if you chose to have a SA – in 2018 you have to appreciate it is going to cost that person. Average legal fees over the last 4 fairly ordinary employees I have dealt with was £850 + VAT. It takes a good hour to get the basic information out of someone who is upset, unprepared, had a shock, then we are bound to have various things to go back and forth about, they won’t have their contract ready or even know where it is, or a payslip, SRA obligations that you write to people, ID checks etc half an hour before you blink, employees will phone and email and say have you heard anything, ask you to repeat what you said before, have a hundred worries about things you and I know and take for granted etc. If you are then only giving £250 legal fees – massive bad taste in the mouth and they will leave saying ‘they couldn’t even pay my legal fees’. They will tell 20 people bad things about you. I will still get paid because I will charge them the difference.
Recent criticism – covering up sex discrimination
Recent case: less than 2 years service – associative discrim, WFH to care for disabled wife, decision to do away with WFH, redundancy, PC, but wouldn’t term it ‘redundancy’ in the SA. Didn’t want other employees to find out etc
Employee may need to invoke mortgage insurance, needs to tell their mother what has happened to them, is entitled by statute if redundant to a letter setting out fact of redundancy so can go to eg:- benefits office.
Grossly unfair if you are relying on it as a redundancy situation to then not allow employee to rely on that?
s52 ERA establishes the right of an employee who has been given notice of dismissal of redundancy to reasonable time off with pay during working hours to enable them to look for work or make arrangements for training for future employment. 2 years’ service qualifying period and only once notice issued - employees couldn’t exercise this at ‘risk’ of redundancy.
The employee has to request time off but no notice provisions apply so in theory at least they can spring this on you. The more notice you have from the employee, I guess the more likely it is to be seen to be a reasonable request. ‘Reasonable’ is not defined and will need to be balanced between your needs eg:- health and safety or having sufficient staffing levels vs the employee’s needs. If I were to tell you that the case law suggests employers can rarely say ‘No’ to a request it will give you an idea of how the Tribunals interpret “reasonable”: I think you’d need a very convincing reason to say ‘No’.
An employee taking time off is entitled to be paid subject to a limit .The maximum is during the whole of their notice period and it is 2/5ths of one week’s pay (note for this purpose a week’s pay is their actual pay and not the capped £508 statutory maximum used for calculating redundancy pay). Thus if the employee earnt £1000 a week, the maximum he or she could earn for time taken off during their notice period is £400. The limit is on the payment not on the time taken off so an employee could take more time and not be paid for that over and above the £400.
If an employer unreasonably refused to allow time off or failed to pay for it the employee could claim in a Tribunal for the money they should have been paid during the time off so relatively modest sums are involved with no fine or anything.
You are not required to pay for any training – that is for the employee to organise. However may be another relatively low cost item which could have massive impact for the person.
In the context of re-employment after redundancy, section 138(1)(a) of Employment Rights Act 1996 (ERA) states that, "where an employee's contract of employment is renewed, or he is re-engaged under a new contract of employment in pursuance of an offer (whether in writing or not) made before the end of his employment under the previous contract… the employee shall not be regarded as dismissed" for the purposes of a statutory redundancy payment. Thus if the next person on the list is still with you - they wouldn’t have the right to a payment.
The renewal or re-engagement must take effect within four weeks of the termination of the old contract (section 138(1)(b), ERA 1996). Thus even if someone has gone and would be coming back, if it’s in that gap continuity will not be broken and the period of time between the employee being dismissed and re-engaged will contribute towards continuous employment (section 213(2), ERA 1996).
If they have already received a SRP that will sever continuity, but only in relation to future claims for statutory redundancy pay (section 214, ERA 1996). Can be preserved for other rights.
As regards making a condition of returning repaying SRP, I can’t see there is anything preventing you making this a term of returning. If they did repay their SRP their continuity for the future for payments would be restored so you might decide it is worth it for future reference not to reclaim it? A policy of repayment is likely to lead to them deciding not to come back (they may have spent the money?) so might hamper your ability to get the skills back too.
That’s why using redundancy to mask a performance issue is problematic – next person on your list might be them!
