Legal
Laying down the law Claudia Gerrard
Redundancies and reorganisations are highly emotive, so organisations need to use the principles of fairness set by case law in order to avoid claims for unfair dismissal, says Claudia Gerrard
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n a time of economic recession, the rail industry, like many others, may face cutbacks. Contracts may be terminated. Clients may become insolvent. Invariably, staff working on those contracts will be at risk. Sometimes staff can be redeployed but not always. The result, therefore, is that more and more companies may be forced to make staff redundant. But very few always follow the correct procedure. So, when faced with the possibility of making redundancies, what is the best approach? How can you make sure that you follow the correct procedures and don’t have disgruntled employees at the end of it?
In any reorganisation or redundancy situation, one of the most important aspects is preparation work. All too often, organisations embark on the process without giving thought to the whole procedure and what it entails. Key matters such as minuting the initial decision and deciding the selection criteria are often overlooked. From the outset, be clear about what you want to achieve and how you are going to achieve it. Justifying the decision can often go a long way towards preventing later claims for unfair dismissal or selection for redundancy claims.
What about the actual process? How can you make it go as smoothly as possible? There are a number of important factors during the process. Staff must be notified if they are under threat of redundancy. Throughout the process, they must be consulted with and kept informed. In many instances, problems can be avoided if staff have been told what is going on. Even absent staff, such as those on long-term sick leave, must be consulted with. If staff feel they haven’t been kept informed, they are more likely to feel
Redundancies and reorganisations: top ten tips
1. Minute the decision:it is important to keep a written record detailing the reason for the redundancy, particularly where staff might query whether or not they need to be made redundant. 2. Decide on the pool: the pool of staff who are at risk needs to be determined early on. Include everyone who is at risk, to ensure fairness. A pool of one may be acceptable in some circumstances, but use with extreme caution. 3. Decide on selection criteria: these must be fair and reasonable. The best motto is ‘when in doubt, leave it out.’ 4. Look at alternative employment opportunities: redeployment, where possible, is essential and paper trails should be kept showing what efforts were made to redeploy. This includes checking on current vacancies and making sure that any potentially redundant employees are considered for those vacancies, as appropriate. 5. Decide on level of redundancy: thought should be given to whether to pay enhanced redundancy packages. An ex gratia payment may often make the process more palatable to employees. 6. Set timescales: from the beginning, decide how long the process will last and communicate this to employees. Staff would generally want to know this but be realistic. Don’t try to hurry the
process along without duly considering everything staff have to say. 7. Consider the appeal process:one or two tiers of appeal should be built in, where possible, and if appropriate to the size of the organisation. Employees must be allowed to appeal and any appeal must be treated fairly and impartially. 8. Notify, consult and keep staff informed:lack of information is often the reason why staff feel aggrieved. Use intranet, emails, or notice boards as appropriate to communicate to staff, as well as holding individual and group meetings. 9. Settlement agreements (prior to 29 July 2013, these were known as compromise agreements): if correctly drafted, a settlement agreement prevents staff making a claim at a later date. Consider use of these where possible to protect against claims in the future. But make sure that you follow the legal requirements for a valid settlement agreement. Otherwise they are potentially unenforceable. Also, ensure that any discussions are subject to contract, as a recent case shows how easy it is to inadvertently reach an unintended settlement. 10. Apply consistent principles: these include fairness, transparency, legal compliance, objectivity, robustness of process and communication.
September 2013 Page 27
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