The City is hiring again, but redundancies are still commonplace

Hakan Enver 24.02.2014

Our guest blogger, employment lawyer Philip Landau, sheds light on your rights if you are facing redundancy, together with some do’s and don’ts.

You can't have failed to see the recent headlines that hiring in the City of London has bounced back, and that optimism in recruitment is also spreading to the rest of the UK. But this doesn’t mean redundancies have stopped altogether- far from it. Whatever sector you are working in, restructuring continues and this inevitably leads to redundancies.

The redundancy process is incredibly stressful for employees, but it can be for employers too as they will be under pressure to get the process right. Their failure to do so can lead to challenges by staff and disruption in the workplace.

So if you are facing redundancy, what are your rights and what process does your employer need to follow?

The Process

  • Consultation

If a redundancy situation exists, your employer must consult all employees who are at risk of redundancy as soon as possible. Failure to consult may lead to a finding of unfair dismissal by a Tribunal. You need to be consulted on why you are being made redundant and whether there are any alternatives. You are able to give feedback here- it is not a one way street, and you should take advantage of it. This is your opportunity to query the rationale for the redundancy and put forward any alternatives.

Where your employer is making 20 or more employees redundant at the same time, they must go down the collective consultation route and liaise with a trade union or employee representative. This does not negate your entitlement also to individual consultation.

The minimum period of consultation if there are between 20-99 employees being made redundant is 30 days before the first dismissal, and this rises to 45 days for more than 100 employees.

  • Selection

If there are other employees carrying out the same role as you, then your employer needs to establish a selection pool, with a number of criteria upon which you will be scored. Such criteria could include your length of service, skills, sickness and performance record. There does need to be an objective and transparent process here. A perverse selection decision by your employer could be open to challenge.

  • Suitable alternative roles

There is a duty by your employer to consider whether there are other roles available which you would be capable of doing. You may not agree that the alternative role is suitable and you can challenge this if necessary. Factors to consider include the pay, status, hours and location of the new position, which should all be as close as possible to the old one. If you unreasonably reject a suitable alternative role, you  may put at risk your entitlement to a redundancy payment.

Below are some Do's and Don'ts to consider when you are facing redundancy:

Do's

  • Do ask to see the criteria governing the redundancy selection process and your scoring so you can establish the fairness of the process.
  • Do take time off to look for another job if you have to. You are entitled under statue to a reasonable time off for this purpose if you have been continuously employed for 2 years by the date your notice period ends.
  • Do make a point of clarifying whether your redundancy termination payments include any expected bonus and outstanding commission payments.  Don’t forget to address the payment of deferred and restricted stock, which is especially relevant in the finance industry.
  • Do try and agree a favourable reference before you leave.
  • Above all, do lodge an internal grievance if you are not happy with the process or reason for the redundancy, and if necessary obtain legal advice about your rights.

 

Don'ts

  • Don’t refuse to carry out the lawful instructions of your employer or any handover tasks just because you are under notice. You are still employed and you can still be disciplined.
  • Don’t automatically take clients with you if you are subject to restrictive covenants in your  employment contract. Either obtain your employers consent, or take legal advice on their enforceability, otherwise you run the risk of legal action against you.
  • Don’t resign before the end of your redundancy to start a new job. You may otherwise lose your redundancy payments. It is far better to either negotiate an early release with your employer.  
  • Don’t start a new job if you have been placed on garden leave. You are still contracted to your old  employer whilst you are under notice and if they find out, you could lose your redundancy payments.
  • Don’t send to your private email address, confidential information such as client lists, processes or other documents belonging to your employer. I have seen many disgruntled employees under notice fast tracked out for doing so, following disciplinary proceedings for gross misconduct.

​  

Philip Landau is an employment law solicitor and partner at London firm Landau Law Solicitors. Follow him on Twitter at @philiplandau or on LinkedIn.

 

 

DISCLAIMER

The information and any commentary on the law on this web site is provided free of charge for information purposes only. Every reasonable effort is made to make the information and commentary accurate and up to date, but no responsibility for its accuracy and correctness, or for any consequences of relying upon it, is assumed by either Morgan McKinley or Landau Law Solicitors. The information and commentary does not, and is not intended to, amount to legal advice to any person on a specific case or matter. You are strongly advised to obtain specific, personal advice from a solicitor about your case or matter and not to rely on the information or comments on this site.

Hakan Enver's picture
Managing Director
henver@morganmckinley.com

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