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Redundancy is a never a nice process to go through for any company or manager, yet it can be made worse if you are unsure of what procedures to follow. In this webinar, I’ll identify the key methods and procedures you should follow when dealing with redundancy cases.
Amanda: Hello. Welcome to today’s webinar. I am Amanda Chadwick. I’m the senior presenter and speaker at Peninsula Business Services Limited.
Today’s topic is redundancy, and today we’re broadcasting from the city of London. I was out at an event last night in London at the HMS Belfast briefing people on the pensions act, and what the employees’ rights are. So today we are in London, as I didn’t get back until very late last night.
So good morning to everybody. Today’s topic is quite a formal topic. Don’t struggle to write down loads of notes, because what we’re going to do is we’re going to make sure that these slides are available later on on YouTube with the recording, and you will have access to that recording anyway. So don’t struggle to try and write these slides down, and there’s a lot of reading off slides today because redundancy is a formal process. So it’s a procedure that you have to get right, because you could end up in a tribunal.
So I’m going to give you an overview to begin with. On the slide in front of you, you can see obviously a picture of myself, but also on the left-hand side you can see Peninsula Business Services Limited, our head office, based in Manchester. Still a family-run firm helping over 27,000 people and businesses throughout the UK, helping them with everyday employment law and health and safety.
What you can also see on that building there, or what you can’t see, sorry, is that it is family run, and you can’t see that it started on the back of a tribunal. Our directors have their own tribunal and decided to set up a company that helped employers, managers and HR do their job and get it right without falling foul of a tribunal, but if they do there’s a whole floor in that building dedicated, filled with employment law, lawyers, barristers, solicitors, advocates who deal with purely employment law. There’s also a floor on health and safety as well.
So that’s the business, and we’re going to talk about redundancy. This is the overview. Redundancy is classed as a dismissal in law even though there is generally no fault to be apportioned to either employer or employee. Therefore any employer making redundancies must follow a fair procedure if they are to abide by the law.
Depending on the number of employees being made redundant, there are different rules that must be adhered to in order to assure that a tribunal would find that a fair redundancy process had been carried out. Where only a certain number of redundancies are required it follows that a selection process must be entered into to determine who out of the current workforce is going to be made redundant, and who will remain in employment. We’re going to talk about this later on, so don’t worry. This is an overview.
This is often where the employers fall down, because their selection criteria are too subjective, or they have an overriding predetermined objective, which renders the selection process futile. Certain types of redundancies require minimum consultation periods, which means that the employer must inform his employees of any proposed action, and consult with them with a minimum time period. This duration of this minimum period will vary dependent on the number of redundancies being made.
Many employers view this period as simply going through the motions to tick the boxes of a fair procedure. However, the consultation period is meant to be the forum through which employees themselves can become involved in suggesting measures that, if adopted, may be able to avoid the redundancies altogether.
Redundancies are a last result. Getting employees involved if the redundancies are being proposed as a cost-cutting measure, no one is better placed to suggest ways of reducing the expenditure connected with certain job roles than the employees themselves. So the consultation period should allow employees to offer ideas on alternatives to redundancy.
Employers should also put their own ideas to their affected employees for a meaningful two-way discussion regarding taking the company forward in light of the pressure it currently faces. There are many potential measures that an employee can take to ease the financial burden in a way that may avoid redundancies. Some are more obvious than others, but all may be capable of making considerable cost savings.
Imposing a freeze on recruitment can either mean stopping the annual recruitment drive, or simply not filling roles caused by natural wastage when employees leave. This would place the focus on retraining current employees to fill these roles, but could be significantly cheaper than continuing to pay a higher salary to an external replacement. A really good idea.
Maintaining the same number of employees but on reduced hours means that valuable skills are maintained, but the overall wage bill is reduced. To achieve this, employees could propose a shorter working week, for example four days instead of the usual five. We’re going to talk about shortage of work and lay-off later in this presentation. This would involve a change to the employees’ terms of conditions, and therefore should only be done with their agreement. A unilateral imposition of a reduction in hours is likely to be risky.
Alternatively, if provision is made in the employee’s contracts of employment they could be placed on lay-off or short-time working. This is not an official change to terms of conditions, but does allow an employer to place employees temporarily on reduced hours or no hours, pay reduced accordingly.
This is, however, only intended as a short-term measure, so should not be used as a permanent resolution without a specific amendment to the terms and conditions. Similarly, offering flexible working may achieve the same result. For example, job sharing, part-time working, overtime is another area; looking at stopping, reducing or altering what is paid if you are paid an advanced rate.
These are just some of the options which we are going to talk about, and actually job sharing, or part-time work, some people are fighting to say they want to change their hours for fear of losing their job. When you’re talking to your staff, when you’re looking at redundancy, this is the option in which you have given somebody the option to come one out and say, “Look, I actually really want to work part-time. I want to spend more time at home with my family.” Or even if people cut a couple of hours here and there, it could make a huge difference.
So, redundancy. There are various reasons why, as an employer, you may need to make some or all of your employees redundant. Business ceasing to operate might be one of them. Relocating. Introducing technology, which may replace the need for certain work; lack of funding; lack of work; carry out the business they are employed for, carry out business of the place where they are employed, need them to carry out work of a particular kind, but remember, for a redundancy to be genuine you must demonstrate that the employee’s job will no longer exist.
Compulsory redundancy. When you make the decision to have compulsory redundancies you must identify which employees you will be making redundant. Be careful. Make sure you select people fairly and don’t discriminate. You should always consult employees in a redundancy situation. If you don’t, any redundancies you make will almost certainly be unfair, and you could be taken to an employment tribunal.
So non-compulsory redundancy. This covers voluntary redundancy and early retirement. Voluntary redundancy is where you ask employees who would like to volunteer for redundancy, put it out there, and then select those to be made redundant. You must have a fair and transparent selection process in place, and just because someone has volunteered, you need to tell them that it doesn’t mean they will automatically get selected. Some people look forward to actually volunteering, don’t they? They go, “Oh, I’ve been there for years and I have a big package, and I have my eye on working abroad,” or something. You need to make sure that they know that it doesn’t mean that they will get selected.
Early retirement. This is where you offer employees incentives to retire early. You can’t force anyone, though, so you can’t put the spotlight on somebody who is over a certain age and say, “We were thinking of you.” Use it as an alternative to voluntary redundancy. The offer must be made across the workforce, not to one individual, and don’t single out specific individuals.
Fair selection criteria. What is that? Well, we’re looking at skills, we’re looking at qualifications, and we’re looking at aptitude, standard of work, performance, and or attendance and their disciplinary record. This all goes into the fair selection criteria. Beware. Only select employees based on length of service, which is the last in, first out rule, if you can justify it. Otherwise this could be indirect discrimination – it affects one group of people more than another.
You shouldn’t rely solely on length of service as your only selection criteria. This is likely to be age discrimination. So things to be careful of there: don’t discriminate, age, etc. So this is what we would call the fair selection criteria. This is where you would have your point system.
Unfair selection criteria: some selection criteria are automatically unfair. You must not select an employee for redundancy based on any of the following reasons: pregnancy, including all reasons related to maternity, family, included parental leave, paternity, birth and adoption. It’s the protected characteristics there. Acting as an employee representative, acting as a trade unit representative, joining or not joining a trade union, being a part-time or fixed-term employee, the age, disability, gender reassignment, marriage, civil partnership, pregnancy, paternity, race, religion or belief, sex and sexual orientation, all of those protected characteristics. Pay and working hours and including the work and time regulations annual leave and the national minimum wage. Another one, really, that should be on that page is refusing to not opt in – you say, “It makes it easy for us if you don’t opt into pensions,” and if they want to opt in you make them redundant. This is not great. This is an unfair selection for criteria.
So alternatives for redundancy. This is the good bit. Redundancy, for me, is always a last resort. I always say, “Let’s look at all the alternatives and ways of cost-cutting before we consider any redundancies.” I like to be involved at the very beginning, as lots of employers think of redundancy as their only option. So here are a few to consider.
Voluntary redundancy, as we discussed earlier on. Early retirement. Seeking and asking applications for existing staff to work flexibly.
Various alternatives, for example, it might be working nights, it might be compressed hours, sharing hours, part time, flexible hours. There are lots of different options there. It’s putting it out there and letting all your staff know what is available now.
For example, if you’re offering people working from home and you’re giving them a core hours per week which is less than they are working in the office, they might take reduction in pay because of the travel arrangements. If they are working from home it’s not costing them as much to travel. It’s not costing them as much on train journeys and time spent getting there and stress, and they might think the benefit of losing a few hours per week and working from home far outweighs working on the office. So look at various alternatives.
Laying off all your self-employed contractors and freelancers, but beware of workforce status here. Lots of employers make mistakes when they’re laying off self-employed people and they end up in a tribunal. Everybody is happy being self-employed until you try to get rid of him or her, and then they try to say, “I am a full-time employee.” Beware of the workforce status.
What your accountant says is self-employed in employment law very well might not be. What we are looking for is clear water. We are looking for them to invoice you for their work, have other employers. We’re looking for them not to wear your uniform or have trained from you, and also if they aren’t available themselves they can send somebody in their place. So my big advice here is beware of workforce status, and also cash-in-hand workers, because cash-in-hand workers have exactly the same rights as an employee.
So not using casual labour might be another one. Restriction of recruitment at that particular time. Reducing or banning overtime, linking to core hours, and if you have heard me talk, I talk about all areas of employment law and you have heard me talk about keeping staff motivated and driving your workforce of commitment, and it all ties in because if you’ve listened to me on my previous webinars where I talk about multi-training your staff and having mentor days. So, for example, I work in, I don’t know, telesales, but I’ve always fancied doing accountimng, you might have me on a day release or weekly release downstairs to accounting to learn accounting and do some skills down there. Not only does that cover you for sickness, but in the case of redundancy, rather than recruiting outside of the office you could actually recruit me on a part-time basis working in the accountants practice.
I’m a true and firm believer in multi-skilling your staff that you’ve already got. So reducing or banning overtime, but making sure you’re linking it to core hours, saving people money, we often do that. It’s all about growth now and saving money, and making sure in your employee handbook that what you say is you don’t qualify for overtime unless you’ve met your core hours in one month. That way you’re stopping people going off sick and saving yourself a bit of money there. So reducing or banning overtime, reducing the payments and linking it to core hours as well.
Filling vacancies elsewhere in the business with existing employees, and short-time working or contemporary layoffs is an extremely good idea, which we will talk about later on. And then looking at your sickness as well.
If you pay full sick pay maybe looking at that. Do return-to-work interviews, reducing the sickness. I actually look at every avenue of your business, from wastage to uniforms to when people leave to try to save you those extra pennies, and that’s what Peninsula does. We try and go in with an alternative rather than redundancy. Lots of policies and procedures that we implement can actually create growth within businesses, and that’s what it’s all about, isn’t it? Saving the staff you have and looking at ways of saving it.
There are other alternatives, such as offering of alternative work. Even if you’ve selected someone for redundancy you can still offer them alternative work. A valid offer should be unconditional and in writing, made before the employee’s current contract ends, and it should show how the new job offer differs from the old one. The job must actually be offered to the employee. They shouldn’t have to apply for it. You can’t say, “Well, apply for that job. Here are some vacancies.”
You have to offer them the job. The new job must start within four weeks of the old job ending. Employees that accept an offer of alternative work are allowed a four-week trial period to see if the work is suitable. If you both agree that it isn’t they can still claim redundancy pay. The trial period can be longer than four weeks if you agree this in writing. If you think the job is suitable but the employee refuses to take it, they might lose any redundancy pay entitlement.
So, redundancy consultations. Remember, if you don’t consult employees in a redundancy situation, any redundancies you will make will almost certainly be unfair. Follow collective consultation rules if you’re making 20 or more employees redundant within any 90-day period at a single establishment. There are no set rules to follow if there are fewer than 20 redundancies planned.
Good practice, though, is to fully consult with employees and their representatives. I would suggest that even if there are less than 20, you have got to consult. You have to have a paper trail. That’s what our defence is.
Employment tribunals could decide that you’ve dismissed your staff unfairly if you don’t consult. Consultation doesn’t have to end in agreement. Consultation should be carried out with a view to reaching an agreement. Include ways of avoiding or reducing the redundancies.
So collective redundancies. Before a consultation starts, notify the insolvency service, redundancy payment service, that’s RPS, by filling out a form called a HR1 form. Instructions on where to send it are on the form. You must send in the notification form at the start of the consultation period, because if you don’t you will get a criminal record and can be fined up to £5,000.
Consult with trade unit representatives or elected employee representatives, or with staff directly if they’re unknown. Provide information to representatives or staff about the planned redundancies, giving representatives or staff enough time to consider them. Respond to any request for further information. Give any effective staff termination notices showing the agreed leaving date.
So the time scales. The government has recently made drastic changes to the consultation process employees have to follow. It was brought in to improve the quality of consultation and to allow employers flexibility to our changing marketing conditions and restructure effectively. No dismissal can take effect before this consultation period is finished.
There’s no time limit on how long a consultation should last, but consultations must start in good time. You can issue redundancy notices as soon as the consultation is complete, but there are minimum periods before they can take effect, which are below. Number of proposed redundancies, when consultation must start. We’re looking at 20 to 99, 30 days, 100 or more, 45 days. You may notice that used to be 90.
So information to provide. The information you must provide to representatives or staff. You should give them written details of this. This is so important. The reasons for redundancies, the number and categories of employees involved, the number of employees in each category, how you plan to select employees for redundancy, how you will carry out redundancies and how you will work out redundancy payments. That is the written details of the information you must provide to representatives or staff. This is very important.
Giving staff notice. Okay. I told you this is a lot of reading off slides today because this is a formal process. I want, when I go away and I finish talking to you, for you to be able to refer to something that you can utilize. Be aware of the date on this presentation. Presentations change, okay? The date on this, be very careful if in five years’ time you’re referring to these notes and they’re out of date. So you must give staff notice. It makes sense anyway, doesn’t it? Agree on a leaving date once you’ve finished the redundancy consultations.
Give staff at least the statutory notice period based on how long they have worked, which we’re going to go through in a minute. You can allow staff to leave earlier than the planned leaving day, example without notice, by offering payment in lieu of notice. You must give staff notice pay based on their pay rate and notice period, or make a payment in lieu of notice. If you have included a payment of lieu in notice for the employment contract you can end your staff’s employment with no notice. This lets you make a payment to cover the notice period you would normally have had to work.
These payments must have tax and national insurance deducted. When you make the payments of your notice you still have to pay the basic pay they would have got during the notice period, including any pension, private health care insurance or other contributions.
So notice periods. Length of service. One month to two years: at least a week. Two years to 12 years: a week’s notice for every year employed. And 12 or more years: twelve weeks.
So redundancy payments. Employees you make redundant might be entitled to redundancy pay. This is called statutory redundancy payment. To be eligible an individual must be an employee working under a contract of employment, have at least two years’ continuous service, have been dismissed, laid off or put on short-time working. Those who opted for early retirement don’t qualify. You must make the payment when you dismiss the employee, or soon after, and a redundant employee also has the right to a written statement setting out the amount of any redundancy payment and how you worked it out.
So redundancy payments. The statutory redundancy pay rates. These are based on an employee’s age and length of employment. They are counted back from the date of dismissal. Employees get 1.5 weeks of pay for each year of employment after their 41st birthday. A week’s pay for each year of employment after their 22nd birthday, half a week’s pay for each year of employment up to their 22nd birthday. Length of service is capped at 20 years and weekly pay is capped at £450.
The maximum amount of statutory redundancy pay is £13,500. You can give your staff extra redundancy pay if you want to, or have a qualifying period of less than two years, but be aware before you go through any redundancy process and always check what you have written in your contracts. Remember, somebody’s statement of main terms might have been in place for years and years and years, so just do a double check before you go through any process.
So now we come to layoffs and short time work, and this is something that I do speak about in my seminars that I hold throughout the country. It’s something I spoke about for many years. It’s something I recommend personally, in employer’s contracts that they write for their employees in the handbook. Whenever I write a contract, whether it’s a startup business or somebody who has been established, I’m surprised that lots of companies do not have a shortage of work or layoff procedure within the handbook. I recommend it in any company throughout the UK. It doesn’t matter what you do because we don’t know what’s around the corner in business life.
We could have a sandwich shop that’s affected by road works. We could have a business affected by floods, drains collapsing; there could be all reasons why we could consider having a shortage of work layoff. Snow, volcanic ash. I sound like some sort of witch here. Lack of funding. Every business that I know should have a layoff and shortage of work procedure in place.
Remember, you can lay off an employee – that’s ask them to stay at home or take unpaid leave – when you temporarily can’t give them paid work as long as the employment contract allows this. Short-time working is when an employee has no paid hours for a number of working days in a week. This is because they are working at a reduced number of paid hours. Their pay is less than half of a week’s pay. Agreements should be in an employee’s contracts, or a national agreement for the industry, or a collective agreement between you and a recognised trade union.
Remember, national and collective agreements can only be enforced in they’re in the employee’s contract. So statutory guaranteed pay. Employees are entitled to these if you don’t provide them with a full day’s work during the time they would normally be required to work. The maximum payment is £24.20 a day for five days in any three months, so the maximum you would pay is something like £121. That’s a lot less than a regular wage. People can claim benefits. They take their letter of layoff or shortage of work to their benefits agency. They can use it for mortgage payments, etc., or insurance on loans they have. So it is brilliant to have the layoff procedure and shortage of work procedure in place.
If employees usually earn less than £24.20 a day they will get their usual daily rate. For part-time workers the rate is worked out proportionally. Remember, employees can claim a redundancy payment from you if the layoff for short time working runs for four consecutive weeks or longer, a series of six or more weeks with not more than three consecutive weeks in a 13-week period. They must give you written notice in advance that they want to make a claim.
You don’t have to pay if they will return to normal working hours within four weeks. Remember, I’m giving you an overview on law today. Our clients would have the benefit of speaking to us when it comes to layoffs so that we would walk them through it, or shortage of work. We would keep their staff informed with the right letters step-by-step so we don’t fall foul of a tribunal. They get it right. There are exclusions to the rule, and these are exceptional and very far and few between.
So any clients that we have on that are listening to me today that are thinking of making redundancies, or layoffs or shortage of work, remember we’re there to hold your hand. That means letter writing, speaking to you on the phone, reassuring you – we’re there 24 hours a day, 365 days a year. That’s what you’re paying us for. I don’t want you to get this wrong. It’s about attention to detail and letter writing, and the paper trail.
So I have a couple of questions here, and again, it’s reading off slides because they are questions and I want to get it right for you. This is a procedure. So the question I had is, “What clause or clauses can I include in my staff’s contract of employment to enable me to reduce their working hours if the company is facing serious difficulties to get work without jeopardizing the interest of the employee or the employees? How long would I give them before I take action?”
The person here is talking about a shortage of work or layoff. You heard me talk about it earlier on, but I’m going to talk about it in a little bit more detail here. Many employers include clauses in their contracts and employment to cover this specific situation, commonly known as layoff for short-time clause. Both layoff and short-time can be utilised by an employer whose work volume is temporarily either much lower than normal or one when there is no work at all.
The ability of an employer to place employees on layoff for a short time must be included in the contract of employment as an agreed term. A week of layoff means providing employees with no work at all. Short-time means reducing your employees’ hours so that they can still perform some work, but this is less than their normal contractual hours.
Pay in both situations are reduced accordingly to number of hours worked. Where eligible, employees may be entitled to statutory guaranteed pay, which we spoke about earlier on: £24.20; maximum of £121, I think it was, wasn’t it, in a three-month period?
If your current contracts do not include clauses enabling you to use layoffs for short time you cannot simply insert it without your employees’ agreement because it would constitute a detrimental change to their terms and conditions. Beware. For goodness’ sake, remember your advice should be conducive to the contracts you have. When you take advice, you must read out what you have got in place. So many people don’t ask to see your contracts when giving advice. It is absolutely bloomin’ crucial that you do this. What you are effectively doing is giving yourself the power to not pay them for a period of time when work is low. If you impose this clause without their agreement you will effectively be unlawfully making a deduction from their pay, and this would entitle the employee to bring a claim to employment tribunal and it is highly likely that they would be successful, and you would be ordered to reimburse the employee or employees the amount of money they were due under their contract of employment regardless of the fact that they did not perform any work on those days.
This is continued. In extreme circumstances the employee could take the deduction as an action which they deem to be so severe in nature that they feel their employment contract has been breached, which contains another penalty breached by you entitling them to leave and claim constructive unfair dismissal. Yes, constructive or unfair dismissal, and breach of contract, etc. So whilst placing your employees on short-time work and unpaid layoff, layoff is not an ideal situation for them. If you explain it to them it may well appear to be the best option. It’s the only other alternative to face being made redundant.
Would you want to be made redundant, or do you want me to shorten your hours for the next few weeks until we get ourselves through this bad patch? This would be especially pertinent if the employee had less than two years’ continuous service with your organisation, which would mean he would not be entitled to receive any amount of statutory redundancy pay.
Just the thought here, remember the car trade when they were having difficulties. What they did, if you remember, is they closed their factories in the month of January when heating would be high, utilities would be high, they weren’t selling cars, they thought they would make their staff take compulsory holidays, and also at the same time make them go off on shortage of work as well.
So employees found themselves with two weeks’ holiday pay and then two weeks on statutory guaranteed pay. So it can make sense because it saved the companies money in pay, but at the same time it saved them a fortune in running costs as well. Consultation would therefore be necessary to obtain employees’ agreement to the new clause. This would likely not be an easy process considering that currently, without this clause, your employees are entitled to full pay in times of no work.
Where the clause is included, there is no necessity to give any period of notice before placing employees on layoff or short time. So you can where I’m coming from here. I put it in straight away. Whenever I write a contract, somebody, even with one member of staff, it’s the first thing I put in place. It does make sense.
So although in the interest of good employee relations, you should keep employees up to date with issues which may lead to layoff or short time. In some cases you will not be able to give any notice, for example, when a client suddenly removes an order.
So if you are starting a new company, then you could include the layoff short-time clauses from the start, meaning that employment is being offered on the basis that layoff short time may be utilised when necessary. No consultation on the inclusion of the clause would therefore be necessary because the employee would therefore be able to decide whether to take that employment with you on that basis or not.
If you are considering this measure with existing employees who do not currently have a layoff or short-time clause within their contract, you may still be able to implement it without risk of being taken to tribunal. This would be the case in the situation where you could argue that your ability to place employees on short time or unpaid layoff is an implied term of their employment.
An implied term is a term that is present in the contract of employment, but which has not been specifically written down or expressed in words. For these purposes it’s useful to remember that referring to an employee’s contract of employment does not refer solely to the document containing those terms and conditions.
The notion of the contract includes any term agreed on verbally or written, including agreements that are not included in written documentation. It also includes implied terms that are generally taken to be terms that are so obvious that they do not need specific attention drawing to them.
There are certain industries, including manufacture or construction where peaks and troughs occur, so inherently accept it as part and parcel of the job that it could be said that the necessity to use layoff for short time is so obvious that it’s agreed between the parties without being included in the written contractual documentation.
I try and make it as short as possible, but we’re talking about a procedure here. I have to get it across and I have to get it across well and spot on. So shortage of work, lay off, it’s something I bang on about all the time in whatever industry. So the other question I had was about making redundancies.
“I’m looking to move my business completely online, removing the bricks and mortar aspect. This will lead to certain roles becoming redundant. How best can I go about administrating this change, and what problems may I encounter when getting rid of these employees?”
I’m getting this a lot, actually. I’m getting lots of people saying to me that they want to make people redundant. They want to go online, their businesses online, so for me it’s absolutely crucial that we do get this right.
So, okay, redundancies are never an easy option because it means a termination of employment through no fault of their own. Terminating employment because of redundancy is classed as dismissal, and consequently is accompanied by difficulties the same as any other dismissal.
Procedure and fairness are paramount in the situation, and a paper trail. The number of proposed redundancies dictates the specific procedures you should adopt. However, the principles are much the same whether it’s four or 40 employees. It is essential that you consult with the affected staff. A large part of consultation is allowing employees to suggest ways in which redundancies may be avoided. No one knows a job better than the person doing it, so no one is better placed to analyse all parts of it with a view to saving jobs.
The aim of this part of the consultation may be for the number of redundancies to be reduced, for example, through job sharing or shift working, or the possibility of retraining. We spoke about this earlier on, okay?
So, where the number of affected employees is less than 20, there is no designated minimum period of consultation, but those set out in any contractual redundancy policy or agreed with a trade union should be adhered to. When the number of affected employees is 20 or more collected consultation provisions apply, where it is proposed to make between 20 and 99 redundancies within a period of 90 days, the minimum consultation period is 30 days. Where the number is 100 or more, the minimum is 45. Where more than 20 redundancies are proposed the employer is required to notify the government. Remember this.
Okay. So collective consultation requires that appropriate representatives are consulted. Where there is no trade union present, an employee representative should be used for this purpose. It makes sense, doesn’t it, to have somebody that can consult and tell everybody what’s going on. Where there are currently no such representatives, you must organise an election amongst your staff to appoint these.
Enough information must be included in the consultation to enable the representatives to make a useful and constructive role, and specified information must be provided to them. We spoke about that earlier on on the other slide, and the information that you need to say.
During consultation, whether individual or collective, the topic of voluntary redundancies may arise. It’s the first thing people say. “Oh, I’m hoping to get redundancy.” This may seem an ideal way to avoid compulsory redundancies. However, you need to consider the negative points. Those who volunteer tend to be those who will benefit more advantageously than others in terms of redundancy pay, i.e. the longer service, so the redundancy pay bill will be higher. If several volunteer but you do not select them all, those not selected may react negatively.
If in subsequent consultation you still need to make redundancies, you should determine how you identify those to be made redundant. The selection criteria should be agreed in advance with the representatives. Last in, first out, LIFO, is a widely known selection process. However, its use may well put you at risk of age discrimination claims. A fairer procedure would be to score the affected employees against criteria so that you can identify the better performers who are more valuable to your business. You should ensure that the criteria used are objective and relevant to the performance of the role.
We spoke about this. Skills, qualifications and aptitude. Selection criteria should not be based on whether someone is a member of the trade union or because someone has requested flexible work in the past. Legislation specifies automatically unfair reasons so employers to keep criteria as job-related as possible.
Employees should be made aware of the criteria, and shown their scores together with the scores of other employees. I know so many people, employers, that have lost tribunals, and remember this, lost tribunals because they do not show the scores of other employees.
They get mixed up and they think it’s interview, but it’s not interview where people are covered under Data Protection. We’re talking about a redundancy situation here. This is one of the biggest mistakes that employers make: unfair selection for redundancy. Then you add weight to the claim because you don’t show them the points of other people. So remember that, okay?
Where possible, employees selected for redundancy should be offered suitable alternative work, which has had no substantially less favourable terms. Employees on maternity leave are entitled to be offered a suitable alternative job in favour of all other employees who are not on maternity leave.
Calculation of redundancy pay should be set out in writing to the redundant employees. You must be sure that all periods of service which count towards continuous service are included in the calculations, including all periods spent on maternity, paternity leave, etc.
I hope that this very formal webinar today was interesting for you. I would like to thank you for listening to me. If you are a Peninsula client you use us to help you. You use us to keep you out of trouble. You use us to protect you, the employer, you the HR, you the manager or proprietor, or the trustee. Use our advice line 365 days, 24 hours a day . . . I was going to say an extra hour a day. I wish there was.
So 24 hours a day, 365 days a year whenever you want to speak to us. So you might want to speak to us at one o’clock in the morning when nobody is about. That’s what you’re paying us for. Remember, we want to keep you out of a tribunal. But if you do end up in a tribunal, that’s what we insure you for. So that means any letter, any communication in redundancies, layoff or shortage of work are done by us because you are our client. Don’t sit there struggling. That is what we are there for.
For non-Peninsula clients, if you would like some free advice, if you’re hitting a situation and you want some advice, you want letters writing, you want us to deal with a one to one situation, or even you would like to meet with us and we can have a look at what you’ve got in place and advise you for free, we will actually sit with you and advise you for free. Give us a call on 0161 827 9915. I will ring you back if you want, or actually you can contact me directly. The emails come direct to me. That’s amanda@peninsula-UK.com, or amanda.chadwick@peninsula-UK.com.
You may have listened to this webinar today and you may want to host an event for your clients. We host these for free, so that means a hotel, it means coffee, it means a big seminar for a couple of hours or whatever you wish on any aspect of employment law for your clients. If you would like to host a free event, contact me, again, on my email, amanda.chadwick@peninsula-UK.com, or amanda@peninsula-UK.com. Remember, in all corresponds to webinar 0027. I hope I’ve helped you today. Not the most interesting webinar. It is actually quite a source of, I would say a boring subject, but it’s quite a sad subject at the same time.
But remember, redundancy is a last resort. I want to work with you at the very beginning before you make your redundancies. In fact, I would even work with you at the start of your business to get things in place that are preventative and save you money, and make your business grow. That’s what policies and procedures are about. That’s what I’m about and that’s what Peninsula is about. It’s about protecting employers, managers and HR.
Thank you for listening to me today. I hope to speak to you again soon, and it’s a goodbye from me. I think my next webinar actually is next Wednesday, I think, and it’s on the Bribery Act. So please join me next Wednesday. Thank you.