Redundancy hasn’t been in the general news recently, although Eversheds, the national law firm did hit the headlines when it was successfully sued by a male employee it selected and made redundant. He alleged that he had been the victim of sex discrimination because he was not scored as well as a female colleague, in the same selection pool, who was on maternity leave at the time. She was scored more favourably because the firm feared doing anything else would have exposed them to a claim for sex discrimination from her. Eversheds are appealing the decision.
Ok, imagine the scenario. You’re told on Friday morning at 9.35 a.m to go to the 7th floor and meet Siobhan, your HR generalist. Only HR live on the 7th floor, not real people. You go into a meeting room with her and there is Charles, your line manager or maybe Fiona, who is really quite senior in HR but not usually seen during the hours of daylight. You’re handed a lengthy letter and told that your role is at risk of redundancy. What do you do?
Answer: try and get as much information out of Siobhan and Charles/Fiona as you can. What to ask?
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10 questions to ask if you’re made redundant
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Most people know that employers these days shouldn’t in job interviews ask women of child-bearing age when they intend to start a family. Nor should they now ask potential employees how old they are. The reason in both cases is that (a) it is usually going to be none of the employer’s business but, also, (b) it runs the risk of the applicant/employee later stating that the failure to appoint them was on discriminatory grounds. A report on the Personnel Today website from a few days ago questioned the wisdom of Cherwell District Council in asking employees to state whether they intended to retire in the next two or three years. The Council is currently asking staff to work fewer hours or to work without pay to avoid the need for redundancies. However, its request to staff to detail their plans and aspirations over the next two to three years could lead to them facing an age discrimination claim, suggests the article, if an employee could show that they were selected for redundancy because of their stated plan to seek retirement. The same risk would apply if a woman stated she intended to start a family and was subsequently place “at risk”.
On the 28th November last year I posted on the above case, which was heard in the High Court, on the redundancy criteria used by Rolls Royce when selecting candidates for redundancy. Please see that post for more details of the criteria used. The interesting point about this particular case is that it looked at the interplay between redundancy selection criteria and the Age Discrimination legislation. Rolls Royce were seeking a declaration from the Court that their redundancy criteria, which added one point per year of service to individual employees’ scores (in addition to the scores they received for various other criteria) WAS in breach of the Age Discrimination regulations. This is because employees with longer service would get more points and was thus indirectly discriminatory towards younger employees.
Two recent cases before the Suffolk ET highlighted the risks that employer face when making redundancies. In this particular matter, Obikwu v British Refugee Council and Ukwaja v British Refugee Council (BRC), two (black) immigration workers were selected for redundancy by their employer, the BRC. The ET found in favour of both workers in April 2008, but it was only in the last few days that Mr Obikwu’s remedies hearing took place which settled the level of compensation to be paid to him. Ms Ukwaja’s case was determined last January.
As you will probably have heard by now, the Chancellor announced an increase to Statutory Redundancy Payment in the Budget yesterday, from the current figure of £350 to £380 per week. He hasn’t said from when the new increase will take effect and the lower figure itself was only introduced in February this year. The government is also considering further legislation on SRP rates in the next Parliament.
So, what does the increase mean? SRP is only payable (by the employer) to employees with two years’ continuous employment experience and that figure is paid to employees between the ages of 22 and 41. For qualifying employees over 41 they will receive 1.5 times £380 = £570. For those under 22 the applicable figure becomes £190 per week.
I posted on this subject a while ago and it has received such a lot of visits I thought I better give my public more of what they want. It also gives me an opportunity to provide an update on the poll I set up below on this issue. At the moment 57% of respondents would elect a pay cut and 31% would take redundancy. The remaining 11% didn’t know. Whether those results will change after this post wil be interesting to see.
Apart from the post below I haven’t touched upon these regulations, mainly because they are not the most interesting regulations in the world to read. However, I have been spurred on by posting on the case of Royden & others v Barnetts (see below) and TUPE comes up quite a few times on the search engines as a keyword. In future posts I will look at the TUPE issues on the insolvency of the employer as well as the consultation obligations imposed upon employers by TUPE.
So, what do the Transfer of Undertakings (Protection of employment) Regulations 2006 (TUPE) actually do?
I ask this because a Private Members’ Bill, sponsored by Lindsay Hoyle MP, is currently making its way through Parliament. Its aim is to increase the level of statutory redundancy pay given to employees with more than two years’ service from the current cap of £350 per week per complete year of service (or £525 per week for workers over 41) in to line with average earnings, as opposed to RPI with which it is currently linked. This would mean an increase in the cap from £350 to £500/750. The award is made up to a maximum of 20 years’ service. Over the years it has fallen behind inflation and means that the maximum an employee made redundant at the moment can receive (in the absence of a claim for unfair dismissal or an enhanced redundancy package offered by the employer) is a maximum sum of £7,000 (for those under 41 at dismissal) or £10,500 for those over 41 (and thus would have to be 61 at dismissal with 20 years service to receive it). In addition employees are entitled to be given their contractual, or statutory notice, and can be asked to work the notice, be put on garden leave for the duration or be paid in lieu. If an employee has less than two years service with an employer he/she is not entitled to any statutory redundancy payment, only to notice.
This is often a live issue in redundancy situations. At the moment, with the number of redundancies rocketing skywards, it is a question that is being put to me time and again. Quite often the employer’s rationale for placing a person “at risk” of redundancy can look shaky.
The definition of redundancy is found at s.139 of the Employment Rights Act 1996. It is defined thus;
(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to—
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