06 Focus on the law
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Focus on the law 07
Redundancies:
the last option
for businesses
“I have been practicing employment law for the
last fifteen years and undoubtedly the biggest
difference between this recession and the last
is that the clients we advise are looking at
redundancies as the last option, rather than the
first. matthew Potter, Partner and head of
Ashton Graham has seen significant employment department, ashton graham
increases in the advice sought regarding cost
cutting measures that could improve financial Many employers cannot afford to make
performance for clients. This indicates a redundancies, as the costs may be inhibitive and
considerable change in employer’s attitudes. They will only really affect their bottom line and create
know they need to reduce overheads but their savings in 6 to 12 month time. The alternatives
first thoughts are to retain staff. are diverse and can provide a win-win situation
Alternatives to redundancy are now frequently for both parties. Employees get to keep their jobs
considered and clients seek a legal perspective, and employers retain an experienced workforce,
especially in relation to the more unusual putting them in a strong position to react quickly
suggestions like the ending of free fruit at work when the economy improves.”
The legal challenge
and the cessation of gym memberships, as well
as the usual proposals of pay cuts, transferring t: 01473 232425
Alex Lock gives us an overview of redundancy
holidays from future holiday years and the e: matthew.potter@ashtongraham.co.uk
offering of sabbaticals. W: www.ashtongraham.co.uk
and the procedure that should be followed.
Organisations come to us because they know
we think laterally; not only providing the ‘black
and white’ of the law, but suggesting alternatives
that will enable their business to ride the
economic downturn. A
s order books decline and profits satisfied that the reason for the dismissal was
continue to slide, most businesses will redundancy. These are consultation, selection,
look to the size of their workforces consideration of alternative employment and
as an important step in responding to the general principles of fairness.
challenges of the global recession. Economists Firstly, the Courts have consistently stated
estimate that unemployment continues to that consultation is fundamental to the
Flexibility First: The Confederation of British Industry
rise for anything between 6 and 18 months fairness of any redundancy process: failure to
after a downturn begins to bite. It is likely, consult is likely in itself to render a dismissal
warned that unemployment would rise to more than 3m by
therefore, that redundancies will be a feature unfair. Different obligations arise, depending
next summer. Many business leaders are looking for a more
of the economy for some time to come. upon the number of employees proposed as
In employment law the definition of redundant.
flexible response. Belinda Eriksson and Jennifer Ison from
redundancy has been much debated in
SW
19
Lawyers, a niche law practice, offer their view.
Courts in the past, but is now fairly settled. In
essence, where an employer’s requirements
It is likely that
for employees to perform work of a particular
Given the negative impact on staff morale, the to work-life balance of employees and offering kind has ceased or diminished (or is expected
redundancies will
loss of skilled workers together with the cost flexible working – whether it be a job share or to), then a dismissal in consequence of that
be a feature of the
implications of redundancies and the possible part time working – as another way of saving will be due to redundancy.
further costs if things go wrong, it might be without resorting to termination. Watch out The emphasis is very much on the number
economy for some
sensible for employers to consider alternatives though; seek consent if your contracts do not of employees required: if as a result of a
to redundancies. provide for this. downturn in work, for example, the employer
time to come.
needs 20 rather than 30 employees then a
Next, employers need to have a selection
redundancy situation exists. Redundancy may
process that is transparent, objective and
also arise where an employer’s requirement does not offend any of the anti-discrimination
for employees at a particular location has
legislation. Once this has been completed and
ceased or diminished, even though by
the required number of employees has been
transferring work to another site it may mean
selected, consideration should be given to any
no fewer employees overall are needed.
alternative positions that can be offered.
Employees that have more than one year’s Finally, an employment tribunal will
continuous service with an employer have consider the general principles of fairness,
the right not to be unfairly dismissed and such as consideration being given to relevant
There are a plethora of options available to
Jennifer ison and belinda eriksson,
can bring proceedings in an employment factors and not taking into account irrelevant
creative thinking employers. A good starting
founding partners of sW19Lawyers
tribunal. If they choose to do so, then not only ones, or allowing employees an opportunity
point is the employment contract: if they have The overriding message from SW19Lawyers is the reason for the dismissal, but the process to see their own selection scores.
been drafted flexibly, an employer may be able that firms that work hard to build support, and of dismissal, will be examined in order to This section will look at these elements
to make changes, without obtaining consent of implement a flexible working scheme fairly, gain determine whether they were fairly dismissed in more detail, to give you a clearer
employees to meet the needs of the business both in the short and long term. or not. For the employer that gets it wrong, understanding of the current best practice in
– allowing employees to work shorter hours, for more detailed information on how the consequences can be expensive, with redundancy procedure.
for example. If the contracts are not so flexible, to manage employment costs and obtain compensation awards of up to £66,200 for
then employers can seek to make changes to employment law advice call: unfair dismissal. Alex Lock is a member of the
the contracts with consent. t: 0208 9477997 There are four main stages which an Employment Lawyers’ Association and
Other advantages of this are the improvement W: www.sw19lawyers.co.uk employer must go through for a tribunal to be editor of their membership journal.
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