Redundancy & Business Reorganisations
On its face, redundancy is a relatively easy concept for employers to tackle – after all it is usually clear when there is a need to make redundancies.
It is not always as simple as one might think however. There is the duty to consider alternatives to redundancy, such as introducing short-time working and foregoing other contractual benefits. Difficult choices often arise as to whether to go down the redundancy route or attempt to change employees’ terms and conditions. Even if most of the staff agree to a pay cut, what can employers do about the one or two renegades who won’t agree to anything?
If an agreement is reached with staff with regards to changing their terms and conditions, then these changes need to be properly documented.
Having decided to make redundancies, how straightforward is the process going to be? How many locations are affected, what are the employees’ places of work (particularly if they are field-based), what areas of the business are involved and how many members of staff need to be included in the pool for selection?
Defining the pool for selection can be difficult. Do employees have interchangeable roles and how far does one widen the pool for selection?
Thereafter, how do employers devise objective selection criteria so as to avoid discriminating against certain sections of staff? What about those people who may be absent on maternity or sick leave?
When collective consultation obligations arise, then some further issues arise. In the absence of any Works Council to consult with, how do employers select employee representatives; how is the ballot conducted and how long does collective consultation continue before employees can be given notice of termination?
In a similar vein, a business reorganisation throws up a host of issues. Firstly, is it a reorganisation or is it really a redundancy especially if employees’ duties are changing but the work has not disappeared or diminished? If it is a reorganisation, then this can involve posts being removed and duties being redistributed amongst other staff. Alternatively, new posts may be created requiring individuals to apply for those posts by means of a competitive interview or other means.
Occasionally, issues of statutory trial periods and employees serving counter-notices to leave early need to be considered and dealt with. Then there’s the employee who is being unreasonable by not accepting a suitable alternative role, instead seeking a substantial redundancy payment.