Redundancy – how should you handle it?

Redundancy – how should you handle it?

Redundancies are increasingly dominating headlines in the media at the moment, with recent large scale redundancy exercises including the collapse of Jamie Oliver’s UK restaurant chain which resulted in around 1,000 staff losing their jobs, Deutsche Bank making 18,000 job cuts following a reorganisation and many staff at Channel 4 opting for redundancy following its relocation to Leeds.

The UK economy, especially with Brexit on the horizon, is more volatile than ever and businesses are taking the decision to streamline their organisations and restructure, usually in an effort to cut costs resulting in a job cuts.

There are two types of redundancy consultation; individual and collective. The type of consultation dictates the process that employers are required to undertake in order to ensure a fair procedure and hence that any ensuing dismissal is also fair (with unfair dismissal claims being reserved for only those employees with a minimum of 2 years’ service). The collective redundancy process is governed by the Trade Union and Labour Relations (Consolidation) Act 1992 (otherwise known as TULRCA) and applies to a situation where an employer intends to make 20 or more employees redundant within 90 days or less. TULRCA sets out various legal obligations that must be complied with when undergoing collective consultation. Conversely, there is no such statutory process for individual redundancies. Instead the procedure to be followed is centred around the principle of fairness based on the guidelines derived from case law.

There are several steps that employers should adhere to from the moment they inform an employee that their role is at risk of redundancy through to any decision confirming the redundancy. These steps involve undergoing a proper and fair consultation process as above which includes, insofar as individual redundancies are concerned, a selection/scoring process and the basis for that employee’s selection, exploring in detail the rationale behind the proposed redundancy and allowing the employee the opportunity to comment, considering alternatives to redundancy, setting out the financial redundancy package and allowing the right of appeal.

Unfortunately, the way in which some employers approach a redundancy exercise can often result in the affected employee(s) being blind sighted and too shocked engage constructively in any consultation process straight away.

Disappointingly, one tactic that employers seem to be using more frequently when dealing with redundancies is to notify the employee that they are at risk and then to ask them to leave the office immediately and remain on paid leave during the consultation period, until such time that the redundancy process is concluded. This is often a huge shock for employees at all levels when they are expected to go from their usual routine of performing their role 5 days/week to being cast aside. Perhaps more concerningly, some employees don’t even get that privilege and instead arrive at their place of work to find that their security pass has been revoked.

So, what should employees who are faced with redundancy do? Here are a few practical tips that we have gained from our clients who have been through the process.

  • Don’t panic – Given the magnitude of the news often coupled with shock, it’s quite natural to panic.  This can result in comments being made which may aggravate the situation further and prove unhelpful at a later date during the redundancy process. With that in mind, try to stay calm and say as little as possible. Let your employer do the talking and try to listen and take notes so that you can reflect on this afterwards. If you cannot take notes in the meeting, take a contemporaneous note as soon as possible and while the conversation is still fresh in your memory. You can also ask the employer to take a note of the meeting and request a copy of this for your review. Be warned, many employers will treat an unauthorised audio recording a redundancy meeting as misconduct so you should think very carefully before attempting to do this.
  • Request a copy of your employment contract as well as any internal redundancy policy (if not already provided) – the reason being that you and/or your legal adviser will want to check the process to be/being followed and make sure this is complied with. It is also important to check your contractual terms to make sure there is nothing else to take into account or which may prejudice you down the line such as post-termination restrictive covenants.
  • Avoid publicising your situation – as tempting as it is to have a rant about your proposed redundancy either to a colleague, in a social setting or online, don’t. It is important that you avoid any criticism about the way you have conducted yourself and that you are not faced with an allegation that you have posted something on social media which is either confidential or disparaging. It is also important to bear in mind that some employers will offer settlement agreements at the outset or prior to the conclusion of a redundancy process and inevitably there will be a confidentiality provision in that agreement that prevents you from discussing the circumstances surrounding your departure (save for certain exceptions). It is therefore important not to fall foul of this from the outset and risk jeopardising any exit package.
  • Try to take a step back – Whilst it is difficult, try to reflect on the information provided to you as to the reason(s) for the proposed redundancy. Are they fair? Do you agree that this appears to be a genuine redundancy situation or does your selection feel contrived? Do you have any concerns that you have been victimised or discriminated against? Do you agree with the redundancy pool and assessment scoring that may have been disclosed to you?
  • Check the ACAS website and seek legal advice – ACAS have produced helpful guidance entitled “your rights during redundancy”. Review this guidance and highlight for your own purposes any areas where you think your employer has failed to act in accordance with this or fairly. Take legal advice. This will not only help you to take stock of the situation before reverting to your employer but also to strategise and devise a suitable way forward. Your employer may suggest that you consult a lawyer from its list of nominated independent legal advisers. Pick your own solicitor or legal adviser who is readily available to you and who you feel understands your situation and objectives. This can be a difficult and stressful process so you should have confidence that your legal adviser is both experienced and supportive.
  • Consider your insurance policies – You may have legal expenses cover within a household policy e.g. a home contents insurance policy or credit card cover that will provide you with legal advice relating to your employment.   Also check your mortgage policy to see if there is room to freeze or pause mortgage payments whilst you may possibly be out of work and without income.
  • Check out the market – Speak to recruitment agents experienced within your industry to ascertain what the job market is really like and a realistic timescale for you to secure suitable comparable employment should you find yourself out of work.  This research will help you budget for being out work and also help you consider your needs when negotiating a settlement package or assessing an alternative position in the company that your employer may offer to you.
  • Look after your health – This is likely to be a stressful and challenging time. Don’t neglect your health as you will need to stay focussed on achieving the best outcome for you in a redundancy situation.  Sleep, eat well, exercise and follow any medical advice that your GP may provide if you are feeling unwell.
  • Professional profile – Do review your cv and online professional profiles including how you appear on LinkedIn. It may be useful to connect professionally and expand your network for future career opportunities, however do take advice from your legal adviser as to how you can market yourself during or following a redundancy process. A settlement agreement and contract of employment may dictate what contact you can have with certain classes of third parties and what information you can disclose about your employment and departure.

This article is designed to be general information only and not a complete guide on dealing with a redundancy situation. For a detailed advice on next steps in dealing with any aspect of redundancy please contact Louise Rogers or Elizabeth Johnson at [email protected] or [email protected] or by telephone on 020 7408 8888.