More on Christmas Redundancies

28 11 2008

Last week I wrote about the solicitor from more northern climes (Cheshire in fact) who, on the Personnel Today website/podcast, was recommending employers hand out P45s to staff rather than Christmas cards this year, preferably as late as possible to Christmas Eve.  A small rumpus followed.  PT reports the results of a poll this week where 45% of the respondents (total number 198) “feared they would be making redundancies this Christmas”.  The report doesn’t say from which business sectors or location the respondents came nor what size they were, but it makes for gloomy reading. 

One kind reader of this blog said he liked what he read but didn’t find it very cheery.  Sorry about that.  Let me try and put a positive gloss on this.  First, it was a small sample so I’d query how representative it is of the wider economy.  Secondly, the 45% that said they would be making redundancies doesn’t necessarily translate as being “mass redundancies” a la Goldman Sachs or Citigroup -it could just mean one or two.  I am seeing quite  a few people at the moment who have been selected for redundancy where it is clear that there are “issues” on the basis for selection. 

In other words, in my opinion, many employers are using the economic downturn as a good excuse to “weed out” those people whose face doesn’t fit.  Undoubtedly this was what our friend from Cheshire had in mind, but it doesn’t make it any more acceptable as advice on “best practice”. 

As usual, if you want any advice on any of these issues please call me on 0207 464 8433 or email me at michaelscutt@dalelangley.co.uk

Advertisements




Redundancy and Age Discrimination

28 11 2008

Over the last few weeks I’ve been writing about the various issues surrounding redundancy procedure and selection.  A couple of weeks ago an interesting High Court case was reported which dealt with the issues arising on redundancy where selection on the grounds of age became relevant.  The case in question was Rolls-Royce v Unite, and was unusual in that the employer was seeking to argue that its own selection criteria was age discriminatory and the Union was arguing that it was not. Normally, of course, one would expect the positions to be reversed.

In this case, Rolls Royce operated a selection criteria that gave points for various factors, such as skill and expertise, achievement of targets, contribution to the business, self-motivation and, particularly relevant for these purposes, length of service. Those with fewest points overall were selected for redundancy. The effect of the length of service factor meant that workers with long service would gain more points and thus be less likely to be selected for redundancy than workers with shorter service who were more likely, therefore, to be younger.  Rolls Royce argued that this policy was indirectly discriminatory because it favoured older workers. 

The Court disagreed and held that such a policy could be justified by the employer (justification for a policy that is otherwise discriminatory being a defence under Age Discrimination legislation) on the grounds that the policy fulfilled a “business aim”, namely it was a contractual benefit rewarded employees loyalty and also that older workers would find it harder to obtain alternative employment upon redundancy.  The scheme was also found to be a means of enabling redundancies in the workforce to be handled “peaceably”. 

What does this case mean for employees and employers?  For businesses it is a double-edged sword because although on the one hand they may be relieved to know that the application if such a selection policy will not land them with claims for age discrimination, it also means that the flexibility they seek in selecting candidates for redundancy is reduced.  Remember, in this case it was Rolls Royce that sought to argue its own policy was discriminatory. The case is also good news for older employees with long service and less good for those with shorter.

 

 This article will appear in the “Docklands” and “Peninsula” newspapers week commencing 1st December.





It’s Christmas – I’m being made redundant!

20 11 2008

This, sadly, isn’t an uncommon complaint.  There are some Scrooge like employers out there who like to extend the festive spirit by handing out the P45 on Christmas Eve and they will have been encouraged in this practice by comments made in Personnel Today (a very good HR and employment law website and magazine) by an alleged “legal expert” from a law firm in Cheshire, advising employers that Christmas is the best time to make people redundant. 

He is reported as saying “I would actually recommend that people who may be a nuisance or disruptive to a business are actually told they’ve lost their job as close to Christmas as possible”.  Nice guy.  He justified this view by saying it would be good for cashflow apparently on the basis that they wouldn’t then need to  make a lump sum payment in lieu of notice (why?) hjhjand would get the unpleasantness out of the way so that everyone could start the New Year in a positive frame of mind.  Presumably his management philosophy is also of “the beatings will continue until morale improves” mindset.

His advice is, of course, complete nonsense.  If his comments have been correctly reported (always a big if) it shows a complete failure to understand the basics of employment law.  The statutory disciplinary and dismissal procedures apply to individual redundancies – although they are being repealed next April they are still in force this Christmas and any employer deciding to get rid of an employee (especially if they are “difficult” or “disruptive”) on Christmas Eve is going to have to ride roughshod over those procedures to achieve the aim of getting that employee out by the New Year.  A claim for unfair dismissal or discrimination is the likely result.  Until April 2009 an Employment Tribunal retains the power to increase an award to an employee by up to 50% where there has been a failure to follow the correct procedure (which, very briefly is: invitation to a meeting, full discussion of the need for redundancy, followed by consultation, followed by decision and right of appeal)  and I suspect that most Employment Tribunals faced with an employer that they judge to have unfairly dismissed an employee on Christmas Eve are likely to want to impose a  50% increase for failure to follow the process. 

It also seems ridiculous to me that axing staff so soon to Christmas is going to improve morale; it won’t, it will merely worry the remaining staff that they will be the next candidates for the same treatment.  I’m just glad I don’t work for him.

The correct way to deal with disruptive staff (whatever that means) is via the disciplinary procedures and by proactive management – there may be a good reason why difficult staff are being “disruptive”; perhaps the employer should investigate the underlying issues?

The only reason I can think for his comments is that he is trying to raise a storm and thus get free publicity.  I’m not going to fall into that trap, which is why I haven’t named him here. 

If you want to read more about it, go to www.personneltoday.com

There will, undoubtedly be Christmas redundancies, there always are, especially in the financial services sector.  If your job is or comes under threat and you want advice on your legal rights, give me a call on 0207 464 8433 or email me at michaelscutt@dalelangley.co.uk





What happens if my employer goes bust?

20 11 2008

What happens if your employer is insolvent? Again, in today’s climate, this is happening all too frequently. If this does happen to you, you should immediately contact your employer’s Insolvency Practitioner for information of what is to happen to the company. You ought to be given forms to make claims for redundancy payments from the HMRC, or alternatively they should advise you if the business or any part of it is to be sold. It is possible for insolvency practitioners to keep employees in employment whilst they make decisions regarding the company’s future.

 

Please contact me on 0207 464 8433 or email me at www.michaelscutt.co.uk for further advice





Redundancy – what are you worth?

20 11 2008

In times where nobody is sure whether or not their job will be safe in the future, it is useful to know what your entitlements are should the worst happen. Statutory (legal) provisions are not the most generous, and consist of an entitlement to notice pay under your contract of employment, or a week for each year full year worked (to a maximum of 12 weeks), whichever is higher. This is payable in accordance with your normal salary amount.

 

In addition, you are entitled to a statutory redundancy payment of a week’s pay per  full year worked if you are over 22 years of age and under 41; 1.5 weeks’ pay per full year worked for each year you are 41 or over (if you’re under 22 it’s half a week’s pay). There is a limit of £330 which is applied to a week’s pay however, meaning that if you earn more than this, you will lose out. Also, you only get paid for full years worked – so if you have been with your employer for two years and eleven months, you will only be entitled to receive payment based on two years pay, not three.

 

Some companies will have a contractual redundancy scheme which will apply instead of the statutory entitlements, if the entitlements under the contract are greater. It will not, however, be paid in addition to statutory entitlements. The first £30,000 of a redundancy payment may be paid tax-free, as long as, generally, it does not encompass a payment in lieu of notice, which will usually be subject to the usual deductions for tax and national insurance.

 

Other companies will have a non-contractual enhanced redundancy scheme, which they offer employees in return for signing a ‘compromise agreement’, which essentially means that the employee agrees not to sue the company for unfair dismissal or any other claim arising out of their employment, in return for this enhanced payment. These agreements are not legally binding unless a qualified person (such as a solicitor) has signed the agreement to state that they have advised the employee on it. This is to ensure that employees are aware of all their legal rights and any employment claim they may be signing away before the agreement becomes binding.  If you need an independent solicitor to advise you on a compromise agreement, give me a call:  I can usually help. 

 

 

 

Please call me on 0207 464 8433 or michaelscutt@dalelangley.co.uk

This article will appear in the “Docklands” and “Peninsula” newspapers week commencing 24th November 





Recognition indeed!

14 11 2008

I am pleased to say that Dale Langley & Co, the firm for whom I work, has been recognised in the Chambers & Partners 2009 Directory, just published.  This is a well respected “bible” of leading law firms and barristers in the UK and beyond.  The recommendation reads;

“Persuasive, realistic and with a good knowledge of the banking world,” this team is praised by City-based executives for its “common sense and diligence.” It is particularly recommended for maximising severance packages. Work also includes High Court restrictive covenant litigation, bonus disputes and discrimination cases. Dale Langleyknows all about the art of the possible” and is also “incredibly up-to-date and plain-speaking.

We’re very pleased with this because we believe we offer a personal service that puts the interests of our clients first and it is good to see that recognised. 

The link for Chambers is www.chambersandpartners.com

To contact me please leave a comment on this site, email me at michaelscutt@dalelangley.co.uk or phone me on 0207 464 8433.

Our main office is at 60 Lombard Street, London, EC3V 9EA.





Consultation on Redundancy

14 11 2008

This is becoming a hot topic again in view of the number of large scale redundancies we are now seeing – 3,000 at RBS and 10,000 at BT announced just this week.  I’m seeing more and more people with compromise agreements seeking advice on their situations, as you might expect.  However, in some cases, the employers are not consulting with their employees at all, but are simply telling them that they will be made redundant and then showing them the door.  This should not happen and can lead to employers unfairly dismissing the employees treated in this way.  If this happens to you you may be able to argue that you have been unfairly dismissed.

Different rules apply depending upon how many employees are being made redundant at any one time and whether there is a recognized Trade Union involved. If within a 90 day period more than 20 people at one “establishment” are to be dismissed, then the employer is under a statutory duty to consult with the affected employees.  At least 30 days consultation must take place before the redundancies occur and that increases to 90 days if 100 or more employees are placed at risk.

Many employers will stage the redundancies to avoid the need to consult in this way.  However, they cannot escape the need to consult at all and must follow (until repealed next April) the statutory disciplinary and dismissal procedures introduced in 2004. Failure to consult in individual cases can lead to a finding of automatically unfair dismissal against the employer and a potential increase in the compensatory award made by an Employment Tribunal (ET). If an employer fails to follow the collective consultancy provisions then an ET can make a “protective award” for failure to consult.  That can be 30 days or 90 days’ salary. 

If a Union is involved then the employer must consult with the union’s representatives.

Since the 6th April 2008, employees of businesses with more than 50 employees are entitled to request their employer to tell them about and consult with them on business issues which affect them.  The Information and Consultation of Employees Regulations 2004 stipulate that if ten percent of employees request it, the employer must set up a system of consultation and information.   If an employee makes that request and is sacked for it, it will be treated by an ET as automatically unfair dismissal.

 

Please call me on 0207 464 8433 or at michaelscutt@dalelangley.co.uk

 

 

 

This column will appear in the “Docklands” and “Peninsula” newspaper week commencing 17th November 2008.