Redundancies and restructures have dominated the headlines recently. Managing a redundancy process can be challenging, so this article looks at some of the duties involved that employers often neglect.
Handling redundancies effectively can prevent long term damage to an organisation's reputation and brand.
What duties do employers have?
The process for carrying out redundancies is fraught with pitfalls for employers. Organisations facing financial difficulty often want to effect dismissals as quickly as possible but this may be at odds with the legal protections for individuals, who require a procedure of adequate warning and consultation if any eventual dismissal is to be fair. Getting it wrong can result in expensive employment tribunal proceedings at a time when further costs really aren't needed.
Where it is likely that more than 20 individuals are going to be made redundant at one establishment within a period of 90 days, then there are even more onerous legal requirements in the shape of collective consultation.
For more information on a fair redundancy process see our previous articles here and here.
A redundancy dismissal will not be fair unless the employer first makes reasonable attempts to identify any suitable alternative roles within their organisation for those losing their jobs. Where the employer is part of a group of companies, this involves considering available roles in other group companies.
Alternative roles should be considered throughout the consultation period and employers can invite 'at risk' staff to make any suggestions of possible roles or alternatives they would like to be considered for. If a suitable alternative position is identified, it should be offered formally, ideally in writing, and the employee should be given a sufficient amount of time to consider it.
If the terms and conditions of the new position differ from the employee's previous role, then a trial period must be offered to allow the employee and employer to assess whether it is suitable. The new employment must then start within four weeks of the employee's existing role ending.
An employee is entitled to reject an offer of suitable alternative employment but will risk giving up their right to a statutory redundancy payment if the rejection is considered 'unreasonable'.
Whether a role is a 'suitable alternative' will depend on an assessment of factors such as any differences in pay and benefits, status, location and job content.
The test for whether an employee's refusal of a new role is 'reasonable' is a subjective one, taking into account the employee's personal circumstance. For example, if they have child care or other caring obligations which would make it reasonable for them to refuse the offer.
The timing of the offer, together with the employer's behaviour and duration of the alternative employment may also be relevant factors in determining this question.
Right to time off during notice period
An employee who is on notice of dismissal due to redundancy and who has 2 years or more continuous service has the right to take reasonable paid time off to look for new employment or to arrange training for future employment during working hours. This right only applies to employees who have that continuous service at the point when their notice expires.
The only requirement is that it is a reasonable request, there is no formal statutory procedure. A reasonable request will involve advance notice and sufficient information about what time off is required.
Employees are entitled to be paid at the 'appropriate hourly rate' for the time they take off in the notice period up to a maximum of 40% of a week's pay. However relevant internal policies may provide for a higher rate of pay.
What a reasonable' amount of time off amounts to will depend on the number of hours employees usually work and how much they have requested. Other considerations include the effect of the employees' absence from the business, the length of their notice period and any rights under a redundancy procedure.
For employers, the key to a successful redundancy process is proper planning, allowing adequate time and keeping channels of communication with employees and their representatives open.
Being at risk of redundancy is clearly a stressful experience for individuals and employers should consider how they can support their employees through the process.
Offering help with skills training and job searching can improve morale and being open with employees and encouraging awareness of their rights and options can be beneficial.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.