The 3 Rs - Redundancy, Restructure and Reorganisation
Breakfast Workshop – The 3 Rs – Redundancy, Restructuring & ReorganisationPeter Stevens, Nicola Brown & Anna Rabone
The 3 Rs – Redundancy3 types of redundancy: 1. Closure of a business 2. Closure of part of a business 3. A diminished need for employees to carry out work of a particular kind
The 3 Rs – Restructure andReorganisation• What do we mean by restructure and reorganisation?• Changes to the organisational structure or to roles within an organisation• May or may not involve a loss of headcount
Overlap between the 3 Rs• Packman v Fauchon (2012) - not necessary to have a reduction in headcount in order for there to be a redundancy• Do the proposed changes go to the heart of the job?
Consultation & Communication• Vital part of a fair process in any situation involving the 3 Rs• Special rules for collective redundancies: • 30 days if 20 or more within 90 days • 90 days if 100 or more within 90 days – (from 6 April 2013 it will be 45 days)• Special rules for TUPE transfers and where collective agreements are in place
Consultation & Communication• Even where collective consultation is required, communication and consultation on an individual level is still key• Explain the business rationale• What does consultation mean?• No set process - all about reasonableness• Size and administrative resources
Selection• How do you determine which role(s) are at risk, or who will be suitable for any newly created roles?• Pools for selection• Can you have a pool of one? • Halpin v Sandpiper (2012) • Capita Hartshead v Byard (2012)
Selection from a pool• Who goes in the pool?• Employer‟s decision as to criteria and scoring (e.g. weighting etc) (Samsung v Monte-D’Cruz (2012))• But – best to get employees‟ input on the proposed criteria before selecting• Who should carry out the selection?
Selection - examples Disciplinary Length of Absence record service record Appraisal Competency Attitude? scores assessments Qualifications Interview Flexibility
Alternatives• A fair process involves considering alternatives to redundancy or reorganisation• Listen to suggestions and respond – no obligation to agree• Will be unfair if suitable alternative employment exists and the employee is not given an opportunity to apply• Maternity leave „trump card‟
Suitable alternative employment• An employee will not be entitled to a redundancy payment if they unreasonably refuse a suitable alternative role• What does ‘suitable’ mean? – Objective test• What does ‘unreasonable refusal’ mean? –Subjective test
Alternative employment• Best practice – give the employee a complete list of all vacancies in the organisation• Let them decide if they wish to express an interest• Specifically point out roles for which they are suitable• Red-circling?
Trial periods• Where a redundant employee accepts another role (whether a „suitable alternative‟ or not)• Statutory trial period of 4 weeks• Can agree a longer period• Rules regarding notice – tricky area
Timing and process• Individual consultation – we recommend a minimum of 2 weeks• Explain your planned process at the outset• Ask for volunteers?• “At risk” – but advise them of what their entitlements would be• Right to be accompanied?
Timing and process• Paper trail – including written invitations to meetings, meeting notes etc.• Where redundancy selection is involved, need to give opportunity to comment on the provisional selection as well as on the situation generally• Ensure that those who aren‟t selected are made aware that the selection is subject to appeal
Right of appeal• A key part of any dismissal process involving the 3 Rs• Ensure that someone with sufficient seniority within the organisation has been kept out of the process to enable them to be sufficiently independent• Written confirmation of outcome
Restructure and Reorganisation– changing roles/terms• Ideally changes are made by agreement• If agreement cannot be reached – potentially fair reason for dismissal (“some other substantial reason”)• Process is very important
Restructure and Reorganisation– changing roles/terms• Explain the proposed changes and the reasons for them• Give the employees an opportunity to comment and deal with any points raised
Restructure and Reorganisation– changing roles/terms• The length of consultation may depend on the significance of the proposed changes• Note that statutory consultation may apply
Restructure and Reorganisation– changing roles/terms• If agreement is not reached by the end of consultation: • Dismiss and offer re-engagement • Impose the change • Risks and benefits of both approaches• Will there be a redundancy payment?