Redundancy and Business Reorganisation

Acas has published new guidance on collective redundancies following the changes to the law which came into force on 6 April 2013.

The government has published the Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment) Order 2013, which will reduce the maximum period for collective redundancy consultation from 90 to 45 days and exclude the expiry of fixed-term contracts.

The government's Fifth Statement of New Regulation has been published. It records the government's progress in reducing the regulatory burdens on business by cutting "red tape" and sets out the dates on which the government intends to bring into force some key employment legislation in 2013.

Are you working on redundancy or TUPE? Have you seen our toolkits on these areas?

PLC Employment has published a toolkit to guide users through key maintained PLC content on collective and individual redundancies, including links to all the relevant materials.

Business Secretary Vince Cable has given a speech outlining the coalition government's plans for employment law reform.

PLC Employment has published some new standard documents providing advice to employees on common employment problems and situations. If you don’t subscribe to PLC and would like to access these materials, you can request a free trial by completing this form or contacting the PLC Helpline.

The EAT has held that it is fair for an employer to apply subjective selection criteria when deciding which potentially redundant employee should be offered alternative employment. (Morgan v The Welsh Rugby Union UKEAT/0314/10.)

Following consultation with unions, the government has announced changes to the Civil Service Compensation Scheme.

A legal update on the Superannuation Bill 2010-11 which received its first reading on 15 July 2010.

A legal update on the EAT's decision in Kraft Foods UK Ltd v Hastie UKEAT/0024/10.

PLC Employment has published new clauses for an employment contract allowing temporary lay-off or short-time working.

An update on the publication of a short form compromise agreement.

The Court of Appeal has held that, although using length of service in a redundancy matrix was indirectly discriminatory, it was objectively justified.

An update on the publication of a new Practice note, Alternatives to redundancy.

An update on the progress of the Statutory Redundancy Pay (Amendment) Bill.

The Employment Appeal Tribunal has held that an employer's application of redundancy selection criteria was outside the band of reasonableness so that an employee's dismissal was unfair.

An update containing key news stories of interest to employment lawyers for the week ending 19 December 2008.

A legal update on the revised draft Code of Practice on Disciplinary and Grievance Procedures published by Acas in November 2008.

The Employment Appeal Tribunal has held that when an employee was dismissed because his employer went into voluntary liquidation and he started working for a new employer six weeks later, his continuity of employment was preserved.

The Court of Appeal has held that protective awards made after liquidation, in respect of a failure to consult about collective redundancies that took place before the liquidation, are provable debts.

Following the European Commission's adoption of a renewed social agenda (see Legal update, Renewed EU social agenda), the European Parliament has published communication documents from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Social situation report 2007: social cohesion through equal opportunities. Non-discrimination and equal opportunities: a renewed commitment. Non-discrimination and equal opportunities: a renewed commitment. Community instruments and policies for Roma inclusion. Accompanying document. Renewed commitment to social Europe: reinforcing the Open Method of Coordination for social protection and social inclusion. Renewed commitment to social Europe: reinforcing the Open Method of Coordination for social protection and social inclusion. Summary of impact assessment. Renewed social agenda: opportunities, access and solidarity in 21st century Europe. Renewed social agenda: opportunities, access and solidarity in 21st century Europe. Summary of impact assessment. Renewed social agenda: opportunities, access and solidarity in 21st century Europe. Impact assessment.

TUC teams up with ALF-CIO to combat "union busters". LMO survey projects rise in redundancy intentions. BERR Committee: Government contracts only to firms with gender pay equality. European Commission publishes gender mainstreaming report.

The Employment Appeal Tribunal has held that there is a duty on employers to consult on the business reasons for making redundancies as part of the obligation to consult on ways in which the redundancies can be avoided.

Government proposes offence of inciting hatred on grounds of sexual orientation. Government to set targets to address inequality. Commissioner for Public Appointments publishes 2006-7 annual report. Council worker wins damages after being sent for an IQ test. Hindu airport worker reinstated after nose-stud row. Business Link provides online statutory redundancy pay calculator.

The Court of Session has held that a transferor could not, in dismissing an employee as redundant before the transfer, rely on the transferee's reduced need for employees to establish that the dismissal was for an economic, technical or organisational reason.

The Employment Appeal Tribunal has held that redundant employees were entitled to a protective award even though they remained employed and were paid by their employer during the protected period.

The EAT held in Patel v Clemence Hoar Cummings that the tribunal had erred in holding that the transitional provisions meant that it was possible for section 98A(2) of the Employment RIghts Act 1996 to apply in this case, but not section 98A(1). The EAT confirmed that the two sections were "inexorably linked" and must have come into effect together.

An overview of the changes in employment law that come into effect on 1 October 2006.

The ECJ has ruled in Anacleto Cordero Alonso v Fondo de Garantia Salarial (Fogasa) that the enforcement of compensation payable to an employee by the state in the event of their employer's insolvency had to be treated in the same way whether the payment was due under a judgment or administrative decision, or under a settlement agreement.

A Private Member's Bill, which had aimed to involve employees in the decision-making process leading to closure of their workplace, has been dropped.

The government has issued a consultation paper dealing with a proposed amendment to the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), clarifying the employer's obligation to notify the Secretary of State of proposed collective redundancies, following the ECJ's decision in Junk v Kuhnel. It proposes a minor change of wording, which obliges employers to notify the Secretary of State before giving notice of redundancy dismissal to any affected employees.

The TUC is concerned that older workers will be worse off as a result of amendments to the way statutory redundancy payments are calculated. Amicus and the Scottish Printing Employers Federation have agreed on the implementation of the Information and Consultation of Employees Regulations 2004. It has been reported that the Women and Work Commission will delay proposing some of its recommendations until August 2006. The Scottish Executive has issued guidance to businesses and organisations on how to implement the smoking ban due to come into force in March 2006. The Task Force on Health, Safety and Productivity has published a "one year on" report on Managing Sickness Absence in the Public Sector. The TUC has published a report highlighting the reluctance of employers to consider flexible working requests. A report by Citizens Advice has found that new fathers are being denied paternity leave because they are not giving their employers enough notice. The appeal to the House of Lords in Durant v Financial Services Authority has not in fact been withdrawn, despite previous indications.

The Court of Appeal has held that in order for a specific type of claim to be waived in a compromise agreement, it must be particularly specified.

The Employment Appeal Tribunal has held that, for the purposes of collective redundancy consultation, an employer "proposes to dismiss" employees even if it is hoping to offer redeployment to most of them.

The compensation limits on tribunal awards have been increased and new rates of maternity, paternity and adoption pay have been announced.

The maximum week’s pay for unfair dismissal basic awards and statutory redundancy pay and the cap on the compensatory award which may be awarded in the majority of unfair dismissal cases have been increased.

The Employment Appeal Tribunal has held that failure to undertake similar or identical levels of consultation with an entire redundancy pool rendered a dismissal unfair.

The Employment Appeal Tribunal has held that the selection of a part-time worker for redundancy because she would not work full-time constitutes a breach of the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (SI 2000/1551).

The Employment Appeal Tribunal has held that when deciding if a redundancy situation exists, tribunals must focus on the requirement for employees to do work of a particular kind, rather than the amount of work to be done.

The High Court has ruled on the meaning of the expression "retires from service at the request of the Employer".

The limits for employment protection compensation (including for unfair dismissal and statutory redundancy pay) have been increased with effect from 1st February, 2003.

The Court of Appeal has held that a company breached the implied term of trust and confidence by not considering an employee’s entitlement to an enhanced contractual redundancy payment.

The employment protection maximum compensation limits have been increased.

The Employment Appeal Tribunal has held that employers must consult on collective redundancies with a view to reaching agreement on the basic premise of not making any redundancies at all.

The Employment Appeal Tribunal has held that redundancy selection criteria in a collective agreement with a trade union were not impliedly incorporated into an individual employment contracts because such procedures were not of day-to-day significance in the employment relationship.

The Employment Appeal Tribunal has held that a failure to recognise an individual as a permanent employer, although a genuine mistake, nonetheless undermined the implied term of trust and confidence because it meant that he was excluded from receiving an enhanced redundancy package.

The European Court of Justice has held that the non-inclusion of full-time workers for selection when redundancies are to be made in respect of part-time jobs does have a disparate impact against part-timers but can be objectively justified.

The Employment Appeal Tribunal held that the obligation to inform and consult with employee representatives is triggered where redundancies are likely unless the business can be sold to a third party.

The Employment Appeal Tribunal has held that two sites constituted a single establishment for the purposes of collective redundancy consultation, due to the way in which the employer organisationally treated the group of employees who were made redundant.

The Employment Appeal Tribunal has decided that when assessing compensation for an employee who had been unfairly dismissed for redundancy whilst on sick leave, regard should be had to when her sick pay entitlement would have run out.

The maximum of a week’s pay for unfair dismissal basic awards and statutory redundancy pay was increased from £220 to £230 from 1st February, 2000.

The Employment Appeal Tribunal (EAT) has decided that an establishing practice of making enhanced redundancy payments had not become an implied term of an employment contract.

The House of Lords has held that, in deciding whether there has been a redundancy, the question to be resolved is whether the state of affairs in the statutory definition of redundancy have occurred and whether dismissal is caused by that state of affairs.

The Court of Appeal has held that where an employer gives an open-ended commitment in relocation expenses, it is not open to the employer to retract from that commitment because of difficulties in selling an employee's former property.

A dismissal on grounds of a genuine redundancy can be unfair on grounds of unfair selection, lack of consultation or failure to seek alternative employment. Industrial tribunals must consider each of these three factors even if they are not expressly raised by the claimant.

It is open to the court to grant an interdict (the Scottish equivalent to an injunction) to restrain the dismissal of an employee who has been selected for redundancy in breach of a contractual redundancy selection criteria.

The government has released a consultation paper regarding employees’ rights to information and consultation on a Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE) transfer or where collective redundancies are proposed.

It is inappropriate to make a protective award where a failure to comply with the minimum consultation periods has had no adverse effect on the employees to be made redundant. Protective awards are compensatory, not penal.

Where an employee is originally engaged on a two year fixed term contract, which is subsequently extended by one or more terms of less than two years each, a waiver of statutory redundancy pay entitlement on the expiry of the final extension is valid provided that the employee had agreed to waive his statutory redundancy pay rights in relation to the expiry of the final extension.

The Employment Appeal Tribunal (EAT) has clarified the proper approach to deciding whether an employee has been dismissed for redundancy.

The High Court has declared that the Collective Redundancies and Transfers of Undertakings (Protection of Employment) (Amendment) Regulations 1995 do not contravene EC law.

Parliament has passed the Collective Redundancies and Transfers of Undertaking (Protection of Employment) (Amendment) Regulations 1995. One part came into effect on 26th October, 1995. The remaining parts come into effect on 1st March, 1996.

Where employees are selected for redundancy based on points awarded against redundancy selection criteria, they are not entitled to see the points scored by other persons in the "pool" for selection.

The Court of Appeal refused to allow complainants of unfair redundancy selection to obtain discovery of the assessment forms of those employees who were not selected for redundancy because the complainants had not identified why the contents of those assessment forms would be relevant to their unfair dismissal claims.

The European Court of Justice (ECJ) decided that redundancy dismissal notices of employees are not cancelled even though the employees are retained in different jobs beyond the notified redundancy date.

The High Court has decided that a recommendation in a collective agreement that redundant employees should receive at least 12 months' notice did not have contractural force. The case also provides indicators to employers as to how to draft non-enforceable collective agreements dealing with redundancy.

The UK has been found to be in breach of the Collective Redundancy Directive (75/129) and the Acquired Rights Directive (77/189) by limiting the obligations to inform and consult with workers' representatives to those employers who recognise trade unions (see Feature article "Worker representation" in this issue).

The government proposes to remove the provision which makes a dismissal automatically unfair if redundancy selection has been made in contravention of an agreed procedure or customary arrangement. In addition, the obligation to notify the Department of Employment of proposed redundancies is to be scrapped.

An employer who fails to consult an employee prior to making him redundant may be able to escape unfair dismissal liability if he can show that it would have served no useful purpose. This is an objective test and the defence will only be accepted in exceptional circumstances, for example, where it was imperative that an immediate decision was taken and there were extenuating circumstances why time could not be allowed for consultation.

The Employment Appeal Tribunal (EAT) has decided in two separate cases that ex-gratia redundancy payments can be used to reduce the amount of the compensatory award and that employers can make an ex-gratia payment on the pre-condition that it is an advance payment of unfair dismissal compensation.

A company that wished to withdraw enhanced redundancy payments, contained in a collective agreement, needed to ensure that negotiations with the trade union had the effect of varying individual employment contracts.

Employers who seek to rely on a workplace or job mobility clause, must make it clear that they are doing so when moving an employee from his current position. Failure to do so may result in the employer being liable for statutory redundancy pay.

The fact that a receiver cannot find a buyer for an insolvent business and therefore the company has to be closed down as a result of no orders coming in, is not an excuse for failure to consult a trade union under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992. Similarly, sudden redundancies to make insolvent businesses attractive to a potential buyer cannot be an excuse.

A purchaser of a business may be able to take advantage of redundancy payments erroneously made to employees of the vendor who are immediately taken on by the purchaser as credit towards future redundancy payments due from the purchaser to those same employees.

The Department of Employment have published the new limits for employment protection compensation, due to come into force on 1st April 1992.

It will not normally be unfair to refuse an employee a right of appeal against his selection for redundancy.

The obligation to start redundancy consultations with recognised trade unions arises as soon as a proposal to dismiss is made. The Employment Appeal Tribunal (EAT) has recently decided that this occurs where a recommendation to contract out a company's security services is made, that is, earlier than the date when the contractor is chosen.

The Department of Employment has published the new limits on employment protection compensation, due to come into force on 1st April, 1991. The Compensatory Award in unfair dismissal cases has a new maximum of £10,000, and the maximum "week's pay" for redundancy pay purposes goes up to £198 per week.

In Wrexham Golf Club Co Ltd v Ingham UKEAT/0190/12, the EAT considered a tribunal's finding that a golf club steward had been unfairly dismissed because the employer had not considered the possibility of establishing a redundancy selection pool.