Redundancy can be a head-scratcher; the process throws out many burning questions for HR teams whilst they are managing a period of business change.
Vista’s employment lawyers provide redundancy advice to our clients regularly, so, we spent an afternoon on the sofa with Tim Cross, Vista’s Director of Employment and Legal Affairs, and asked him the top five redundancy questions which always come our way. He answers them below:
1. Does an employer have to accept volunteers?
Legally, the answer is no. Although, employers need to think carefully about the effect that turning people away then making compulsory redundancies might have. If employers do go down this route, they risk being left with demotivated and disengaged employees that wanted to leave.
2. Can absence be used for the purposes of redundancy selection?
Absolutely, yes. There are a few qualifications that employers need to think about here. Firstly, understand the reason behind any absences that may have occurred. Any absence that comes underneath the heading of family related absence, pregnancy related sickness, other forms of family leave and time off for dependants will need to be stripped out.
Employers will also need to make any adjustments that might be required following any disability related absences to comply with their obligations under The Equality Act.
3. How do you deal with a change in business circumstances?
So, an employee that has been made redundant is now claiming unfair dismissal because the business circumstances have changed since the dismissal.
There is a famous case that can help to illustrate the answer to this question, Atkinson (Octavius) and Sons Ltd v Morris 1989.
As a very short summary of the case, Mr Morris was selected for redundancy, but was transferred with a colleague to another site where it was hoped there would be work to keep them in employment. At lunch time, two days later, however, Mr Morris was told that there was no further work and his employment was terminated without notice. On this day, 29th August, Mr Morris left the site at about 2pm. At approximately 4pm the company received an urgent call for work to be carried out on the following Monday. The company didn’t contact Mr Morris to offer him the work and so he claimed unfair dismissal.
As Mr Morris’s contract was terminated at lunch time on the 29th, before the company knew of the alternative employment, the Court of Appeal upheld the employer’s appeal and ruled that the dismissal was fair.
What’s important to note here is that an employment tribunal is looking at the circumstances relevant to the dismissal at the time of dismissal not what happened afterwards.
So, if business circumstances do change (genuinely) unexpectedly, it doesn’t change the fact that at the time of dismissal it was fair based on the facts.
4. What is the relationship between a mobility clause and a redundancy?
The existence of a mobility clause and its relationship within a redundancy situation is really important. A company might think it’s in a redundancy situation, however if there is a mobility clause in a contract and it is sufficiently precise the mobility clause might actually remove the redundancy situation altogether on the basis that an employer can simply invoke the mobility clause, in order to move the individual to a different location.
5. To what extent do you need to treat locations separately, or as one for the purposes of redundancy selection?
This one depends on the proximity of the locations in question. For example, if you have two separate sites that are pretty much next door to each other, you will struggle to treat them separately in a redundancy situation. However, if you have sites which are spread across the country or just a few miles apart, you will be able to treat them as separate establishments.
In a collective redundancy situation, your obligation to consult is based upon the number of proposed redundancies at that particular location so if your locations are geographically disparate – they can be treated separately.
For advice and support on managing redundancies please drop Tim or another member of the Vista team a line via email, phone, our website or social media.