Business Reorganisations

Business reorganisations sometimes appear relatively straightforward. Typically, the triggers include a downturn in trade, a new technical innovation, or a site closure.

As a precursor to making redundancies, there is a duty for the business to consider alternatives such as introducing short time working or temporary pay cuts. Choices must be made whether to instigate a redundancy process or attempt to change employees’ terms and conditions.

Alternatives to Redundancy

• Short-time working, lay-offs, and temporary pay reductions. They must be contractually permitted or agreed, and employees may become entitled to redundancy if laid off for extended periods.

• Redeployment within the business or wider group.
• Seeking voluntary redundancies or agreed changes to terms and conditions.

Changing Terms of Employment

• Requires employee agreement or consultation followed by potential dismissal and re-engagement.
• Careful planning is needed to mitigate breach of contract and unfair dismissal risks.

Selection Pools and Criteria

• Objectivity and fairness are key.
• Consider interchangeability, job location, and role duplication. Remote working potentially complicates identifying pools.

Alternative Employment and Trial Periods

• Employers must offer suitable alternative roles where available.
• Four-week statutory trial periods apply, with potential for extension by agreement.

Electing Employee Representatives and Collective Consultation

• Required for collective consultation where there is no recognised union.
• Process must be fair and inclusive; micro-businesses may be exempt.

• Consultation triggered where 20 or more redundancies are proposed at one establishment within 90 days.
• Includes information obligations and minimum consultation periods.

Intra-Group Reorganisations

• Even internal restructures can give rise to TUPE or redundancy obligations.
• Requires due diligence and contract review across affected entities.

Redundancy and overlap with TUPE Transfers

• In some cases, TUPE and collective redundancy duties coincide.
• Timing and cooperation between transferor and transferee are crucial for compliance.