Redundancy/Dismissal advice.

[BoogaBooga]

Hi guys,

Sorry if this is very long-winded, but I really need some advice as to the legality of what my current employer is doing.

I have been with this company for 5 years.

Last week (Tuesday), the entire business was taken to an update meeting, where a "business transformation" plan was presented. What this boils down to is that as a cost-cutting exercise, redundancies would be necessary.

However, to avoid redundancies and keep everyone in a job, the management had come up with a "better" way to do things - by changing the rotas to Annualised Hours.

These Annualised Hours entail working a 50-hour week, usually for 5 weeks or more at a time, at different points of the year (normally around Christmas/Winter), along with a pay freeze (no cost of living rise) and Overtime no longer paid at a higher than standard rate.

Now, they said that the new contracts of employment MUST be signed by 80% of employees by next Tuesday (less than 2 weeks after the meeting/briefing) otherwise redundancies will be forced. This date is fast approaching, and nobody has had any consultation, time to read the new contract, or been shown anything more than a "proposed" shift rota for the Annualised Hours. They've "hard-sold" this by saying that anyone who signs the contract by next Tues will get a lump-sum cash bonus at the end of the financial year.

Now, those who do NOT sign the contract by next tuesday do NOT get the cash bonus, and immediately enter a 90-day consultation period to discuss and go over the new contract. If, at the end of this period they have still not agreed to sign it, then their current contract is "terminated".

They are NOT offering any redundancy or severance package in this instance, stating that the changes to the terms and conditions of contract reflect business needs and are exceptional circumstances. In this case they believe they do not owe anybody redundancy, and cannot be held liable for unfair or constructive dismissal.

My question is, can they do this? Are they allowed to introduce, and basically blackmail and hard-sell through such a drastic change in working conditions/a new contract and simply tell you that if you're not happy with it, you can use the door?

Despite these changes, there are also grave doubts as to whether the position I currently hold is going to be around much longer. What will likely happen is that my position will be made redundant, and they will offer a lower-pay position that I previously held (over a year ago) before progressing to the new one. In this circumstance, am I entitled to claim redundancy pay and leave instead of accepting a pay cut and lower-grade position within the company (as this would have a dramatically negative effect on my finances and home life). They seem to believe that, again, as my current position would no longer exist the only choices I have are to take the lower position or walk out the door with nothing, "in line with business requirements".

Basically, they are skirting around redundancies yet threatening to fire anyone who does not accept the new contract and working hours. I think with this hard sell, "we'll give you money....really" tactic, they're trying to pull a fast one. The whole thing stinks.

As I said, any advice would be very appreciated, especially if it can be given quickly as I will be forced to sign the new contract on Friday unless I can produce a valid legal reason as to why I should not.

[poppynurse]

Phone ACAS quick!

[Sidewinder]

I don't neccessarily agree with the hard line attitude, but on the face of it, your employer would seem to be acting lawfully. It would seem that they have a business need to save money, and in order to do so they need to change employees contracts of employment to create some efficiencies.

Now we all know that contracts of employment are fixed and cannot be varied without the permission of the employee, and from what you have said they are offering a bonus to those who decide quickly to accept - this is customary - in other words to 'buy out' the terms which you want to change. Where employees are not willing however, ultimately the employer has to terminate the employee's existing contract and offer them re-employment on the changed terms - but you would lose accrued rights and length of service benefits.

You do not of course have to accept those terms and in such circumstances are deemed to have resigned, albeit you may then take action for a breach of contract, but unfortunately any damages awarded would be limited and this course of action is not normally cost-effective unless you are particularly well paid and stand to lose a lot through the breach.

Your employer cannot make you redundant in the circumstances which you describe as the position is not 'redundant', merely that there is a pressing financial need to cut costs but he wants to retain everybodys' jobs.

As suggested above, phone ACAS for proper advice, but it does seem to me that what they are doing is tough, but not neccessarily wrong, and you have a choice to make - either accept with some sort of bonus, or decline and be forced to resign. I hope that it all works out OK in the end.

[Sidewinder]

Originally Posted by BoogaBooga

Hi guys,
Despite these changes, there are also grave doubts as to whether the position I currently hold is going to be around much longer. What will likely happen is that my position will be made redundant, and they will offer a lower-pay position that I previously held (over a year ago) before progressing to the new one. In this circumstance, am I entitled to claim redundancy pay and leave instead of accepting a pay cut and lower-grade position within the company (as this would have a dramatically negative effect on my finances and home life). They seem to believe that, again, as my current position would no longer exist the only choices I have are to take the lower position or walk out the door with nothing, "in line with business requirements".

Of course this is different - if the position which you hold is to be made redundant, then you as the post holder would become 'at risk' of redundancy and would be entitled to proper redundancy consultation and to be given the opportunity to explore alternatives to redundancy. This could involve proposing a pay cut for yourself, changes to your working hours or being given the chance of applying for an alternative position (and yes this can be for a lower salary and at a lower grade if that is all that is available). If however there are 4 positions the same as yours (say if you are a Sales Administrator working alongside three other Sales Administrators) and one of those positions is to be made redundant, then all four of you must be considered at risk and a proper selection process used to determine who goes - the company cannot just select one of you without going through the selection process. Consultation should also be an opportunity for you to ask why your position is going and not somebody else in what you consider to be a less important role - you are entitled to know what has led to the employer's decision.

The two scenarios are completely different. If the employer still needs somebody to do your job, but not on your current terms, then he can go through the process required to change your conditions or terminate the contract and issue a new one. If however your position will cease to exist in a revised organisational chart, then you must be made redundant - the employer cannot in that case force you to accept a different job without the option of redundancy. In the case of redundancy you would be entitled to be given the correct period of notice required either by law (a minimum of a week's notice for each completed year of service up to a maximum of 12 weeks) or by your contract, whichever is the greater, plus any accrued holiday, and at least the statutory redundancy payment. Unless your company offers more generous severance than statutory, this will be a week's wages for each completed year of service, with a week's wages capped at a maximum £330. This assumes that your five years service have all accrued when you were older than 21 years old - should any of those five years have been completed before the age of 22, then you would only get half a week's wages for each year. Conversely, if you are older than 41, you qualify for one and a half weeks for each year completed over the age of 41 .

[BoogaBooga]

Hi Sidewinder,

Thank you very much for the feedback.

With regards to the change in contract, I think you've confirmed what I suspected.....they're acting right on the cusp of legality. Immoral, sure, illegal? No.

I guess the only thing it really shows is how much they really care about staff or their often touted "investment in people" and "family first" policy.

As to the possibility of my current position being abolished, do I HAVE to accept the lesser role offered to me or leave with nothing? Is the fact that I simply could not pay my bills/mortgage every month on the lower grade enough to reasonably refuse it and claim redundancy instead?

I think it's time to abandon the sinking ship, tbh, but I just want to be sure while I'm job-hunting that they aren't suddenly going to decide my position no longer exists and I'm not entitled to redundancy for some reason.

[Sidewinder]

Originally Posted by BoogaBooga

As to the possibility of my current position being abolished, do I HAVE to accept the lesser role offered to me or leave with nothing? Is the fact that I simply could not pay my bills/mortgage every month on the lower grade enough to reasonably refuse it and claim redundancy instead?

I think it's time to abandon the sinking ship, tbh, but I just want to be sure while I'm job-hunting that they aren't suddenly going to decide my position no longer exists and I'm not entitled to redundancy for some reason.

This is where things can become complicated - as I said before, there is a difference between a termination of contract and being made redundant.

IF your job is to continue, and the work which you do will still need to be done by somebody, then it is not redundancy, but the employer may terminate your contract as a means of forcing the issue if you do not agree to a change in terms. You may then have grounds to reject the new contract, resign and claim constructive or unfair dismissal - constructive for the breach of contract, and unfair if there are grounds to suggest that the employer does not have sound reasons for imposing the change in terms or has handled the situation unfairly. You have a contract which expressly states that you are employed as X, are paid X by way of a salary and work X hours in return for the salary. Any change to this without your agreement is a breach of contract, and you have rights in law. The damages you may be awarded however will be limited to actual losses sustained as a result of the breach unless you also have a case for unfair dismissal, in which case the award is higher.

Note - your contract should always be a starting point in determining exactly what your employer is entitled to change - if there is a clause which allows the employer to make variations to hours or location for example then this completely changes things.

IF your current role is to be abolished (made redundant) however, then your employer has a legal responsibility to explore alternatives which would keep you in employment - that is the aim of consultation (it also closes the door on any claim which you may later make for discrimination or flawed procedure if you are not given the option of remaining in work). This means that if a suitable alternative position is available then you should be considered for that role. Similarly, you cannot easily refuse a reasonable alternative position.

As an example, suppose you are a Puchases Clerk working 9-5 and the purchasing operation is to be centralised, resulting in your position being made redundant. The employer however is proposing to expand the sales operation and is creating a vacancy as a Sales Clerk, working the same shift pattern and for a similar salary. The offer of the position of Sales Clerk would most likely be considered a reasonable alternative and you would be unlikely to be able to refuse and claim redundancy. If the alternative job involved a notable change in hours, reduction in salary or any other unreasonable change in status then this would be considered grounds to reject the offer. Also remember that if you do accept the alternative, then this must be subject to a trial period with the option of redundancy at any point during the trial if the job proves not to be suitable. This can sometimes be a means of buying a little time if you are looking elsewhere.

Note the use of the words reasonable and suitable. This will vary from person to person and is not a matter for the employer to determine. Naturally an alternative job with a drop in salary will be completely out of the question for some, but may be acceptable to others. Similarly a switch from working days to nights, however if the alternative in your situation would involve financial hardship, changes to childcare etc, then clearly this is unreasonable in your particular case and you would be under no obligation to accept the change in your job.

Hope that helps. Events like this do tend to focus the mind somewhat (I know and have just been through it myself). The main thing is to meet with your employer and to ask any questions which may allow you to make a decision. It is perfectly OK to ask about redundancy, job security or anything else which is on your mind, and you may find that you learn more in a one to one meeting.

[BoogaBooga]

Thanks again, Sidewinder.

Just one more question....

Another alternative that was proposed to making my entire job role no longer existing, was that EVERYONE in the department were to lose their jobs, then reapply for the position which would be reopened across the whole business for applicants.

The job role would be exactly the same, same title etc. but they need to reduce the headcount in this role by roughly half.

In this instance, don't they NEED to go through a redundancy consultation/offer of alternative positions etc. for those whom they decide to axe? Can they, as they plan, simply abolish the department, then recreate the numbers they require in it (doing exactly the same job), by reopening applications to build it from the ground up again? Basically, in this instance, those who originally held the position but did not get the job again having reapplied, would simply be told there is no job for them and bye bye. Surely this approach is not legal at all?

[Sidewinder]

In effect this would be placing the entire workforce of the department 'at risk' and the reapplication process becomes part of the selection process.

To do this the would still have to engage in a formal consultation process either collectively (if more than 20 redundancies are proposed or anticipated) or individually. The job applications become one of the scoring criteria used to select those who will stay or go, and you are entitled to know by what means they have scored you if unsuccessful. Those who are not successful are entitled to full consideration for any available role, and redundancy payments in the normal way if nothing suitable is found.

This is a common way of doing things and quite legal as long as very strict selection criteria are applied. It may benefit the employer by being able to start with a 'new broom' (and also not having to single out one person to dismiss) but can be a potential minefield as it leaves them far more vulnerable to a complaint of discrimination (if one of those affected were to be gay, pregnant, black or now older than the successful candidate etc).

It seems as though they haven't decided exactly how many people they may need to make redundant from what you say - another indication that they may be on shaky ground, and I would imagine that even those whose jobs are safe at present must be getting a little nervous for the long term.