Dismissal and Redundancy cause Employer’s Headaches
We can help you navigate a safe route through dismissal of staff, either via performance, a need to cut workforce size or via redundancy. As so many employers are struggling with redundancy currently here is some help.
Business reorganisation is a complex and worrisome area for employers, which is often aggravated by worries over employee redundancy process. The situation in respect of businesses operating a statutory redundancy policy is made slightly easier to navigate due to the extensive support and resources available. The GOV website is particularly useful in this respect when it comes to calculating redundancy pay: https://www.gov.uk/calculate-your-redundancy-pay
Where a business has an enhanced scheme or is paying above the statutory requirement things become more complicated. Generally, where an enhanced scheme is offered this will have been done after some form of consultation and should therefore be accompanied by a detailed policy on calculating the benefit applicable to the employee.
An enhanced redundancy scheme can incorporated into an employee’s contract through express or implied means. If it is express it will usually be explicitly set out either in the contract or in another document which is referred to. Where they are implied, this can happen through ‘custom and practice’; generally such a policy must be established and well known.
When operating an enhanced policy the employer must be careful to avoid any conduct which could raise age discrimination issues, which is a common threat where age and/or length of service is used to calculate the payment, unless they closely follow the statutory model as it would then be exempt under legislation. Where the scheme does not come under the exemption the business would need to show it is a proportionate means of achieving a legitimate aim, thereby objectively justifying the scheme, such aims can be encouraging/rewarding loyalty, enabling the employer to manage change and operating a commercially viable business.
During the redundancy process it may be that an employee is offered alternative employment within the business, this could include reduced hours/pay, using a different skill set and or moving to another part of the business. Should an employee refuse such a role, they do not automatically forfeit their redundancy payment.
An employee would need to unreasonably refuse an offer of suitable alternative employment in order to be treated as dismissed and lose their right to a statutory redundancy payment (an enhanced policy would require a comparable clause in order to avoid being in breach of contract).
In order to establish if the alternative position was suitable requires an objective assessment having regard of the job status, terms, wages, hours and location, taking into consideration the employee in question. A drop in status has been held to be ‘unsuitable’. In terms of the refusal, whether it is an ‘unreasonable refusal’ depends on whether a hypothetical employee would have accepted it, therefore being a subjective test. The more suitable the offer, generally the easier it is to show a refusal is unreasonable.
It’s complicated so let us guide you through it and that’s one less thing to worry about. Call 01244 300413 or email [email protected] for a no obligation chat today.