Breakfast Workshop on Redundancy, Restructuring & Reorganisation
1. Breakfast Workshop – The 3 Rs –
Redundancy, Restructuring &
Reorganisation
Peter Stevens, Nicola Brown & Anna Rabone
2. The 3 Rs – Redundancy
3 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
3. The 3 Rs – Restructure and
Reorganisation
• 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
4. 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?
5. 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
6. 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
7. 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)
8. 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?
9. Selection - examples
Disciplinary Length of Absence
record service record
Appraisal Competency
Attitude?
scores assessments
Qualifications Interview Flexibility
10. 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‟
11. 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
12. 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?
13. 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
14. 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?
15. 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
16. 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
17. 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
18. 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
19. 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
20. 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?