Redundancy Masterclass: 8 Tricky Issues and How to Deal with Them

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How to handle challenging aspects of redundancy, including employees on maternity leave, discriminatory selection criteria, targeting expensive employees, scoring adjustments for disabled employees, employee disputes, disabled employees at risk, and persuading the board.

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  1. Redundancy masterclass 8 tricky issues and how to deal with them Lindsey Cartwright & Elise Turner Morton Fraser LLP

  2. Todays Session Redundancy overview 8 tricky issues: Employees on maternity leave Pools of one Recognising and avoiding discriminatory selection criteria Can you target expensive employees? Scoring adjustments for disabled employees Employee disputes around selection scores Should a disabled employee at risk be slotted into a vacant role? Persuading your Board not to follow the P&O example

  3. Redundancy a reminder One of the potentially fair reasons for dismissal 4 redundancy scenarios under Employment Rights Act:- Cessation of business Closure of workplace at place where employee employed Reduced need for employees to carry out work of a particular kind Reduced need for employees to carry out work of a particular kind at a particular location Fair process: Fair warning/proposals at a formative stage Selection pools/objective criteria and scoring Consultation/alternative employment Collective consultation if 20 or more employees in a 90 day period

  4. 1 Pools of One Higher risk of losing an unfair dismissal claim Often used because of other advantages Will be scrutinised closely by ET Range of reasonable responses test Consultation is arguably even more important Mogane v Bradford Teaching Hospitals NHS Foundation Trust No consultation re process decision on selection criteria inevitably meant claimant in a pool of one Held to be unfair dismissal Consultation must occur at a point when employee can influence the outcome

  5. Our tips. Be prepared to withstand scrutiny Paper trail of:- Need to reduce the number of employees Consideration of wider pools and documenting decision to have a pool of one Supporting analysis of the benefits of that decision Consult with the individual for longer Thorough consideration of alternative roles Listen to the employee can you do anything to soften the blow?

  6. 2 Recognising and avoiding discriminatory selection criteria Must have objective selection criteria, but even objective criteria may be discriminatory Typical criteria and typical claims Attendance disability discrimination / pregnancy-related absence Flexibility single parents indirect sex discrimination LIFO age discrimination /sex discrimination (career breaks) Home-working carers - Follows v Nationwide Building Society (2018) employee worked from home to care for disabled mother. Criteria requirement to be office-based to enable easier supervision. Indirect discrimination by association.

  7. Our tips. Risk assess your pool - before deciding on selection criteria, ask yourself:- Are there employees with known disabilities? Are there employees whose family situation has an impact? Assess what the business needs post- redundancy exercise? Not just immediate needs for doing the work Rounder view need for diversity and inclusion Avoid criteria which appear gratuitous

  8. 3 Scoring adjustments for disabled employees Attendance discount all disability-related absence consider a longer period over which to assess apply a reasonable reduction Performance/Conduct Were there reasonable adjustments in place? Were procedures robust at the time? Did the employee relate the issue to their disability previously?

  9. Our tips. Risk assess your pool - before deciding on attendance or performance as a selection criterion, ask:- Are there employees with known disabilities or anyone within the pool who you have a reasonable suspicion has one? Is the general level of attendance higher than the your sector average? Is there anyone you regard as a poor performer and has there been performance management around that? If not, why not? Be clear about your policy on adjusting scores up front, with reference to your Equal Opps policy puts you on the front foot to tackle any argument

  10. 4 Should a disabled employee at risk be slotted into a vacant role? Could it be a reasonable adjustment to simply give a disabled employee a vacant role, rather than requiring them to interview with other at risk employees? Hillaire v Luton Borough Council The substantial disadvantage he was put to as a result of his disability would have been alleviated BUT not a reasonable adjustment disproportionate disadvantage to other employees

  11. Our tips. Remember that you are alleviating a disadvantage caused by the medical condition and its effects aim is to place employee on an equal footing So ask what is the disadvantage that the employee is at as a result of their disability?...and address that May take longer to find alternative employment for a disabled employee, because of the duty to consider reasonable adjustments consider extending the timeframe for this

  12. 5 Employees on Maternity Leave Should be consulted with on matters which may affect their role Shipp v City Sprint UK Ltd out of sight should not mean out of mind Current protections right to be offered suitable alternative employment New protection from moment a woman notifies her employer she is pregnant, until the child is 18 months old (still to be debated in HoL but looks set to become law later this year)

  13. Our tips. When dealing with people on maternity leave:- employee may feel particularly isolated take steps to ensure comms are robust and timely At outset, agree how/when/who around comms to suit employee s circumstances Take control of implementing channels of communication with other employees too do not make unfair assumptions about their return to work intentions do not volunteer their maternity leave as being the explanation for them being offered alternative employment (either to the employee or to colleagues) Train and support those dealing with the comms

  14. 6 Can you target expensive employees Cost reduction may not be a redundancy in terms of the Employment Rights Act Check will there be fewer employees afterwards? Targeting most expensive may be indirect age discrimination test is whether it is a proportionate means of achieving a legitimate aim Cost of redundancy is sometimes used as a selection criterion, but it will have the opposite effect HM Land Registry v Benson (EAT)

  15. Our tips. Analyse the cost-age ratio early to risk-assess the likelihood of a claim Can you reach the same result with different selection criteria? Rather than concluding that compulsory redundancies are required, might it be better to consult with staff first on cost-cutting measures? See what comes out in the wash? Remember ultimately that more expensive employees will have higher value claims (will take longer to find another job, monthly losses will be higher etc) so factor that in to your calculation of budgeted savings

  16. 7 Handling employee disputes about selection scores Consult about selection scoring/weighting in advance, including how you propose to score Scoring process must withstand scrutiny Inform employees of scores and break point Be prepared to explain Do not identify who is who by comparison confidentiality and data protection Dispute re score being too low ask for detailed explanation as to why it should be higher and consider

  17. Our tips. Provide advance training to those scoring Include early warning about not exchanging emails offering pre-conceived views about particular employees or particular outcomes, specifying names (recoverable by DSAR) Have in place a method of sense-checking scores Keep a paper trail of what has been considered Remember, exercises in England have different rules of disclosure applying must produce relevant documents which might be unhelpful Privilege only applies to comms with lawyer, not HR

  18. 8 How to persuade your Board not to follow the P&O example P&O 786 redundancies without prior consultation Some employers starting to look for other ways of conducting reduction of employee numbers without abiding by legislation Limited number of potential fair reasons for dismissal makes this challenging- ends up with reasons for dismissal which don t withstand scrutiny

  19. Our tips. Do not underestimate how much some advance warning/consultation allows people to feel more control/prepare for the inevitable Do not forget that even small steps towards supporting employees towards gaining new work will be appreciated Cash is key do what you can Don t make it personal Reputationally, the cost might be enormous and future recruitment will be difficult

  20. Questions? 20

  21. Contact us


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