BA has been in the news … again and, as usual, for all the wrong reasons. The company formerly claiming to be the world’s favourite airline has now asked 40,000 of its staff to not just take a pay cut but to work for nothing for a month to ensure the company’s survival. Now there’s an enticing offer … not.
Employment Law Explained
Tag Archives: Redundancy
More on Redundancy v Pay Cuts
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.
TUPE
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?
The new statutory disciplinary and dismissal procedures
For T.S Eliot, April was the cruellest month. For employment lawyers it can be the busiest because of the plethora of new legislation and statutory instruments being introduced. This year is no different and today sees The Employment Act 2008 come into force, replacing the discredited Employment Act 2002 (Dispute Resolution) Regulations 2004. In The Wasteland, TS Eliot wrote “what are the roots that clutch, what branches grow out of this stony rubbish?”. Admittedly Eliot was talking about the human condition and the moral and spiritual bankruptcy of modern society, rather than the 2004 regulations, but there is even so great resonance in those words for employment lawyers. Few people have had anything good to say about the rules and today they are abolished, replaced by a set of rules that are much less rigid but will give rise to other problems in the future.
Climate change – the new religion?
If there was any doubt that it was then it has been dispelled by a London Employment Tribunal recently. The facts are interesting enough, but the point of law raised is potentially massive and may cause to happen what Judges fear more than anything else: the floodgates opening! Cue Biblical style disaster, get building the ark now! (Judges and lawyers always worry about “the floodgates” opening when there is a new development in law – it might mean a deluge of cases swamping the courts).
Am I really redundant?
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—
Redundancy or Pay Cut? Poll Results
I’ve been running a poll on the above topic since my post on the 27th February. Two weeks on and the results seem remarkably balanced – 38% in favour of a redundancy package and 38% in favour of a pay cut, with 23% undecided. I was expecting the clear winner to be the pay cut, given the difficulty in getting a new job at the moment. I’ll keep the poll running and see if the result changes over time.
Thanks to all those who took part.
Redundancy or Pay Cut?
Not an enviable choice to be faced with, but one that an increasing number of people seem to be having to make, or have foisted upon them, in industry. It is a practice that doesn’t seem to have caught on here in the City where swingeing headcount cuts still rule supreme when an employer wants to cut costs. I’ve written many times in this blog before about the redundancy process and selection criteria and the claims that can arise when employers get it wrong. However, what must an employer do if they decide that a pay reduction is preferable to a cull?
What is the cost of redundancy?
According to research published by the Chartered Institute of Personnel Development the answer is approximately £16,000 per person. They reached this figure by using a complex formula where the cost of redundancy = (n x R) + (X x H) + (X + T) + ny(H + T) + Wz(P – n). There isn’t space here to list all the individual factors, but they include the obvious costs, such as size of redundancy payments, number of people made redundant, hiring and training costs as well as perhaps less obvious ones such as the reduction in efficiency caused by low morale of remaining workers. The one costs that doesn’t seem to be factored in is management and HR time involved in putting together and executing redundancy programmes. Judging by some of the clients I am seeing at the moment, there are plenty of employers out there making a hash of cutting back their workforces. For the full press release go to www.cipd.co.uk.
Happy New Year!
Hello again and all best wishes for 2009. I have to say that I don’t feel particularly enthusiastic about life, the universe and everything at the moment but that may be because I’ve been laid low over Christmas with a most virulent gastric bug that put paid to just about all my plans. At least I can say I had more time to spend in my bathroom but you really don’t want to know anymore about that.
Despite the continuing economic gloom life here has been fairly quiet. I saw my first compromise agreement of the year today – not a bad package and a bonus was included (which is not something I’ve been seeing that often recently).