Burness presentation from HR Network Conference 2012

1. Burness
Edinburgh Glasgow
Employment Law: Help or Hindrance
to Sustainable Transformation?
Chair: Ronald Mackay
Presentations by David Morgan & Morag Hutchison
HR Network Conference 2012
17 May 2012

2. Burness
Edinburgh Glasgow
Sustainable Transformation
Outsourcing
Performance
Management Options Redundancy
Alternatives
to
Redundancy

3. Burness
Edinburgh Glasgow
Outsourcing
• Cost of services
20% Cost
Savings • Management time
• Specification of
services
Aims • Negotiation of
Improve
contract
Performance Minimise
• Practicalities of
Time
Standards
transfer
• Employee issues

4. Burness
Edinburgh Glasgow
Outsourcing
• Identify services to transfer • Identify services to
• Identify services to transfer
• Identify new Provider and
“Hard” TUPE
“Fair” TUPE
transfer
“Straight” TUPE
• Identify new Provider and obtain information on
obtain information on • Identify new Provider
“measures” • Identify employees to
“measures”
• Identify employees transfer (“Lemon drop?”)
• Identify employees “assigned” to entity
“assigned” to entity • Employees transfer with
• Identify employee terms/continuity/liabilities
• Identify employee representatives and
representatives and • Obligation on Provider to
commence information dismiss staff
commence information (and consulting) process
(and consulting) process • No liability for any costs
• Provide employee liability
• Provide employee liability information 14 days before
associated with employees
information 14 days before transfer
transfer
• Employees on list transfer
• All employees transfer with with terms, continuity,
terms, continuity, liabilities liabilities and liable for
• Joint and several liability additional employees
for any failure to inform transferring
(and consult) • Joint and several liability
• No liability for events prior for any failure to inform
to transfer unless transferee (and consult)
objects to transfer • Liable for events prior to
transfer/provider liable for
events after transfer

5. Burness
Edinburgh Glasgow
Outsourcing
AIM RISK IMPACT SOLUTION
Failure to I&C with
Minimise Incorrect
identification of
correct staff
Missing “employee
Warranty/Indemnity
from Provider
Time transferring staff liability”
information
“Brief” I&C process
Minimise Failure to inform
Financial penalty
(up to 13 weeks Indemnity from
(and consult)
Time salary) Provider
Liability with Provider indemnity
Improve Dismissal Provider but risk of Compromise
“two party” claims
Performance “automatically”
unfair
Agreement
Increase in contract New location –
Standards price redundancy?
NB REMEMBER SECOND GENERATION TUPE

6. Burness
Edinburgh Glasgow
Redundancy
Complete Closure • The business disappears
Closure of place of
business • The workplace disappears
Diminished need
for employees • The job disappears
Diminished need
for employees at • The job disappears there
particular location
Section 139, Employment Rights Act 1996

7. Burness
Edinburgh Glasgow
Redundancy
Identifying When is the
Collective
redundancy duty to consult
consultation
situation engaged?
Counting the
numbers of
Proposal to dismiss proposed
by reason of redundancies
Redundancy or re- redundancy
organisation or Separate
both? Contemplating the ‘establishments’
need for
redundancies Volunteers &
Suitable
Alternatives

8. Burness
Edinburgh Glasgow
Redundancy
Anatomy of the consultation process
The business case*
Volunteers
Pools for selection
Selection criteria
Provisional selection
Suitable alternative employment
Redundancy packages
Support to look for alternative employment
*Remember your “three P’s”: “provisional, possible and potential”

9. Burness
Edinburgh Glasgow
Redundancy
Generating Options
How do you calculate
number? Who are appropriate
How long for consultation?
representatives?
20 or more = 30 days ‘establishments’
Recognised trade union
100 or more = 90 days Volunteers
Employee reps
Suitable alternative
How is a protective award
When can you service calculated? Can we stagger the
notice? process?
13 weeks salary
The Junk case The Tribunal’s approach
Change in approach
Should we use
Compromise Agreements?
Protective award claims

10. Burness
Edinburgh Glasgow
Alternatives to Redundancy
Change Management
• Are difficult decisions more achievable in difficult
times…?
Is redundancy really the only viable option? What
are the alternatives?

11. Burness
Edinburgh Glasgow
Alternatives to Redundancy
Pay Hours Jobs Benefits
• Pay freeze • Short-time (no work, no • Recruitment freeze • Cut pension contributions
• Deferred pay change in pay, but staff • Stop agency • Reduce spend on
• Pay cut ‘owe’ un-worked hours in workers/temps insurance plans
upturn) • Redeploy staff • Remove benefits in kind
• Reduce bonus
• Sabbaticals (paid and • Job-sharing
• Unpaid work
unpaid)
• Demotion
• Reduced working week
• Secondments to other
• Part-time contract companies
• Cut overtime • Early retirement
• Re-structure shift working • Voluntary Redundancies
• Unpaid holiday leave • Compulsory
Redundancies

12. Burness
Edinburgh Glasgow
Alternatives to Redundancy
The Process of Change
Implement
Consideration and
decisions
Consultation process
Consultation is King – inform/explain
Avoiding/minimising redundancies
Business case for change

13. Burness
Edinburgh Glasgow
Alternatives to Redundancy
Some Other Substantial Reason
SOSR
Termination and re-
engagement
Dealing with refusal to
agree to variation
Implementation of change –
preferably with employee agreement
Reasonable notice of proposed change
Consultation

14. Burness
Edinburgh Glasgow
Alternatives to Redundancy
Short time Reduced Reduced pay or
Sabbaticals Secondments Redeployment
working/ lay-off working week benefits
• Retain talent • Internally/ • Statutory • Retain talent • Flexibility & • Working harder
• Continuous externally concept • Voluntary Mobility for less money
employment? • Retain talent • Need the agreement • Moving talent • Agreement –
• Paid/ unpaid/ • Good client contractual • Creative to more unlawful
partially paid? relations right solutions occupied areas deduction from
• Transferring the • Guarantee of the business wages
cost payments • Re-training • Long-term
• Delaying the • 4 weeks or • Interplay with sustainability &
inevitable? more redundancy employee
entitlements engagement
• Suitable
alternative
employment
• Trial periods
• Temporary or
permanent?

15. Burness
Edinburgh Glasgow
Alternatives to Redundancy
Constructive
dismissal
Breach of
Stand and sue
contract
Risks &
Remedies
Unfair
Working under
dismissal
protest
(SOSR)
Ulterior
Discrimination
motives

16. Burness
Edinburgh Glasgow
Managing Poor Performance
Option 1 Option 2 Option 3
“Best Practice” “Hybrid” “Quick Fix”
Follow own Policy
Clear specification of issues
Clear specification of issues
Formal meeting Dismiss immediately & offer
Formal meeting
Explain process/consequences package
Set targets and review x 3
Introduce “alternative”
6-9 months process
“Part” value compliant
Best Practice Employer/Value
Doesn’t prevent fair process Quick resolution
compliant
“Deal” at employee’s instance Certainty through Compromise
Genuine opportunity to improve
Strengthens negotiating position Agreement
Good chance will be “fair”
Compromise Agreement
Lengthy process Employee doesn’t accept
package (final salary pension)
Payment of notice at end Employee calls your bluff
Weak negotiating position =
Management time Compromises process higher settlement
Still risk of claim Compromises “values”

17. Burness
Edinburgh Glasgow
Managing Poor Performance
Option 1 Option 2 Option 3
“Best Practice” “Hybrid” “Quick Fix”
Follow own Policy
Clear specification of issues
Clear specification of issues
Formal meeting Dismiss immediately & offer
Formal meeting
Explain process/consequences package
Set targets and review x 3
Introduce “alternative”
6-9 months process
“Straight forward” – 6-9 months
Likely package – 6-9 months More adversarial
Absence – long term – 12 months including notice Likely package – 9-12 months
Absence – intermittent – 12 Legal fees - £500 Legal fees - £1,500
months
£30,000 (9 plus notice) £15,500 (6 months) £24,000 (9 months)
£37,500 (12 plus notice) £23,000 (9 months) £31,500 (12 months)
No Compromise Agreement Compromise Agreement Compromise Agreement

18. Burness
Edinburgh Glasgow
Risk Management – Emerging Issues
Unfair
dismissal after
2 years service
Compulsory Employment
ACAS Judges sitting
Conciliation alone
Employment
Law Reform
Witness
Employment
Statements
Tribunal Fees
‘taken as read’
Protected
Mediation Conversations/
Pilot Scheme Settlement
Agreements

19. Burness
Edinburgh Glasgow
We’d like to hear from you
David Morgan +44 141 273 6770 david.morgan@burness.co.uk
Ronald Mackay +44 141 273 6769 ronald.mackay@burness.co.uk
Morag Hutchison +44 131 473 6029 morag.hutchison@burness.co.uk
@BurnessEmplaw @DavidMorganLLB @MackayRonald @MoragHutchison