Redundancy and Restructure
Employee rights during redundancy and restructure
What do these terms mean?
Redundancy and restructure situations are due to decisions taken by the employer to reduce headcount at the company, or to change the skill-profile of a particular team. A restructure may or may not result in redundancy, but even if it does not it may cause employees other problems in relation to their role. Redundancy occurs when an employee is dismissed.
A legitimate redundancy process is never the fault of the employees affected, and as such an employee can feel helpless, unsupported and even betrayed by their employer while having to deal with major changes in their life.
Often, employers offer settlement agreements to employees they have identified as redundant, but this does not necessarily mean that the procedure that has been followed is fair, or that redundancy is inevitable. If you have are facing redundancy and have been offered a settlement agreement, the best thing you can do is obtain free advice from our partners who will be able to advise you as to whether the settlement value offered to you is adequate, or whether you have a case for a higher settlement via negotiation.
What is Redundancy?
The definition of redundancy is when an employer ceases to carry out, or requires fewer employees to carry out, work of a particular kind that they undertake at a particular place of business.
In practice, this can mean reducing headcount within a team or keeping the same headcount but with a different skillset. It may mean entire teams or departments are made redundant, places of business are closed or simply that a certain unique role is deleted.
What are the Key Principles of a Redundancy Exercise?
Redundancy is a potentially fair reason for dismissal under the Employment Rights Act 1996, but the employer must first establish that there is a redundancy situation that may result in dismissals for redundancy. It then must act fairly and ensure dismissal is a reasonable response to the situation. In practice this almost always means:
- Consulting with affected employees at the earliest opportunity about the reasons for the redundancy situation, the likely number of dismissals for redundancy and ways in which dismissals for redundancy can be avoided.
- Consulting with affected employees about any method of selection for redundancy, if appropriate.
- Undertaking a fair selection process.
- Holding consultation meetings with employees selected for redundancy.
- Taking steps to secure alternative employment for any employees selected for redundancy.
- Allowing selected employees the opportunity to appeal.
Have I been unfairly selected for redundancy?
This is one of the most common questions we are asked, and it depends upon the unique situation of the employees affected.
No one scenario is the same, even within the same company using the same process; however, if the employer has failed to adhere to the basic Key Principles listed above, or has acted unfairly while applying the Key Principles, then it is likely that an employee will be unfairly selected for redundancy.
Common examples of unfair redundancy:
- The employer applying incorrect scores to an employee to dismiss them
- An employer failing to properly consult
- An employer preventing an employee from finding alternative employment in the company
- Another key complaint may be in a scenario whereby an employer changes an employee’s job profile, or restructures a team in order to employ another person, rendering the current employee redundant. This scenario will often lead to complaints of unfair dismissal.
What do I do if I think I have been Unfairly Selected for Redundancy?
The short answer is, get in touch with us and we will help you!
Unfair selection for redundancy, and even unfair dismissal for redundancy is not the end of it. Even if you have a very strong case, your employer has an array of defences in redundancy cases that may mean any compensation that you could claim can be substantially reduced.
This includes the defence of proving that despite the unfairness of the dismissal for redundancy, there was a strong chance that you would have been dismissed fairly had they followed a fair process. The availability of this defence often means that a claim in the employment tribunal is not financially viable for the employee, and negotiation is the best remedy.
Unless the claim involves a form of discrimination, or the employee earns over £150,000 a year, we would advise that in almost all cases the employee would be better off negotiating a settlement agreement at the earliest opportunity.
Restructures
Restructures may not result in redundancies, or they may not result in your redundancy.
If you have been subject to a restructure, you may find yourself in a scenario whereby you are undertaking a new, unwanted role, or you are undertaking additional duties for no additional pay resulting in you having to work long hours.
This situation may result in a breach of contract by your employer, or constructive dismissal.
