Redundancy Policy

The Company aims by careful forward planning, to ensure as far as possible security of employment for its employees. However, it is recognised that there may be changes in business requirements, competitive conditions, organisational requirements etc that may affect staffing needs.

This policy sets out the Company’s position in relation to any potential redundancy situation, thereby assisting anyone involved in the process to properly understand the requirements and to ensure fair implementation.

2. Redundancy definition

The definition of redundancy is as follows:

· The employer has ceased, or intends to cease to carry on the business for the purposes of which the employee was so employed; or

· The employer has ceased, or intends to cease, to carry on the business in the place where the employee was so employed; or

· The requirements of the business for employees to carry out work of a particular kind has ceased or diminished or are expected to cease or diminish; or

· The requirements of the business for the employees to carry out work of a particular kind, in the place where they were so employed, has ceased or diminished or are expected to cease or diminish.

3. Avoiding redundancies

The Company will endeavour to avoid compulsory redundancies wherever possible. Measures for avoiding compulsory redundancies may include a mixture of the following or other viable suggestions, as deemed to be appropriate:

· Natural wastage

· Reducing employment of casual staff and staff employed via agencies

· Seeking volunteers for early retirement and/or voluntary redundancy^[1]

· Redeployment and, if possible, retraining, to other parts of the organisation (where vacancies exist)

· Wherever possible, reduction or elimination of overtime working

· Restrictions on recruitment

· Considering suggestions from employees/employee representatives

· Trying to make savings in other areas

4. Consideration of volunteers

Wherever possible the company will request volunteers for redundancy. The company will take into account the needs of the business and reserves the right to refuse any volunteers for redundancy.^[2]

5. Collective Consultation (proposed redundancy of 20 or more employees)

The purpose of consultation is to provide as early an opportunity as practicable for all concerned to share the problem and explore the options.

In the event that the Company is proposing to make 20 to 99 employees redundant, consultation will take place for a period of at least 30 days before notice is served or before the first dismissal will take effect.

In the event that the Company is proposing to make 100 or more employees redundant, consultation will take place for a period of at least 90 days before notice is served or before the first dismissal will take effect.

In the event of 20 or more redundancies steps will be taken to elect representatives of the affected employees in good time to participate in meaningful consultation. OR

[Where unionised: In the event of 20 or more redundancies the Company will consult with trade union representatives of affected areas [if applicable -and will take steps to manage the election of representatives for non-unionised areas affected.]

Where there is any delay in electing representatives (which is not as a result of the company) this time delay will be taken into consideration as part of the consultation period timescale.

Consultation will be concerned with the following:

· Explaining the background/circumstances/reason(s) for proposed redundancies.

· Exploring any alternatives to redundancy (including but not limited to those set out in section 3 above) and ways of reducing the numbers involved.

· Defining the areas potentially affected by redundancy.

· Defining the potential numbers affected and the total number employed within each area, i.e. manual employees, clerical employees etc.

· Selection criteria applicable to the redundancy situation.

· The timescale.

· Inviting volunteers (if appropriate).

· Employee’s entitlement on redundancy.

· Alternative employment efforts.

6. Determination of numbers/areas involved

Management will take into consideration the views expressed by employee/ union representatives. However, the decision as to where to make redundancies and how many ultimately rests with the company. The company must provide advance notification of the redundancies (if more than 20 in a 90 day period) to the Department of Trade and Industry by completing an HR1 form.

7. Selection Criteria

Since the need to maintain a balanced, skilled and experienced workforce after redundancies is paramount, various selection criteria will be used to help achieve this. If appropriate, the selection criteria may be varied for any particular redundancy situation following collective consultation, in line with current legislation.

The selection criteria may include some or all of the following. The list is not exhaustive:

Where a matrix assessment is being determined, it will be designed to include a reasonable balance of subjective and objective criteria.

Management may wish to weight the criteria to reflect the future requirements of the Company.

· When attendance records are to be used management will carefully assess the reasons for and extent of absences. Absences relating to disability or Statutory Family Friendly policies will be discounted. Any absences agreed by the Company e.g. unpaid leave; compassionate leave, etc will also be discounted.

· A matrix based assessment, where possible, will be undertaken by at least two people who know the work and ability of the employees they are assessing.

· Where possible the matrix will be moderated by a third person.

OR

[Where applicable: The Company operates a Last In First Out criteria] ^[4]

OR

[Where applicable: The Company uses length of service in a matrix or as a ‘tie breaker’]^[5]

The decision as to which criteria to use ultimately rests with the Company.

8. Individual consultation

On completion of collective consultation, if relevant, the Company will enter into individual consultation with those employees identified as being at risk of redundancy

9. Conduct of meetings under the procedure

After initially advising the employee verbally that they are at risk of redundancy the employee will be sent a letter setting out the reasons for the potential redundancy and the fact that their position is at risk of redundancy. The letter will invite the employee to discuss the matter and confirm the time, date and location of the meeting. It will also confirm the statutory right reasonably to request to be accompanied (see below). Any employee who has difficulty understanding such a letter should ask [HR/Personnel Manager] for an explanation.

Before the meeting the employee will be provided with all relevant information and given reasonable opportunity to consider, together with a permitted companion (see below), his or her response to that information. This will include, where appropriate, alternative vacancies.

All consultation meetings, including appeals, will be held at a reasonable time and place. An employee who has been invited to attend a meeting must take all reasonable steps to attend the meeting.

Other than at the initial “at risk” meeting, an employee has the statutory right reasonably to request to be accompanied by a fellow worker or accredited trade union official of his or her choice at all meetings including appeal meetings. The companion may address the meeting to put the employee’s case, sum up his or her case or respond on the employee’s behalf to any view expressed at consultation meetings. He or she may also confer with the employee during the meeting, but does not have the right to answer questions on his or her behalf, address the meeting if the employee does not want him or her to or prevent anyone, including the employee from making his or her contribution at the meeting.

The appropriate level of management [together with a representative of the HR/Personnel Department] will conduct meetings. At the individual consultation meeting, the Company will explain the role of all those attending on its behalf. The company will then explain the reasons for their provisional selection for redundancy and will give the employee the opportunity to respond in full. The Company will carefully consider representations made by at risk employees. If an employee is selected for redundancy they will have the right to appeal (see 13 below).

Management will duly consider any representations put forward, and advise the employee of the outcome of such considerations if necessary at a second or subsequent consultation meeting. The Company will hold as many consultation meetings as are necessary to properly consult with the employee.

The company will consider whether employees likely to be affected by redundancy can be offered alternative work within the organisation. ^[6]

If available, full details will be given to the employee to enable them to decide whether to accept or not.

In order for the Company and the employee to have an opportunity to decide whether an alternative job is acceptable to both parties, a trial period of 4 weeks is provided. A longer trial period may be agreed. During this trial the new terms and conditions of the alternative role are applicable. At the end of the trial period should the employee or the Company find this role unacceptable (and no other alternatives to redundancy have been identified) the employment will be terminated on the grounds of redundancy and the employee’s redundancy entitlement will not be affected. Should the alternative role be considered acceptable to both parties, the employee will continue in the role and retain their continuity of service. ^[7]

If volunteers for redundancy are accepted, the Company still need to comply with the provisions outlined in section 9 above.

11. Issue of notice(s)

Where selection has been confirmed, those selected for redundancy will be given notice of termination of employment.

12. Entitlements upon redundancy

Where applicable any employee declared redundant will be paid redundancy pay as calculated in accordance with current relevant legislation. When determining an employee’s weekly pay for the purposes of calculating his/her redundancy payment the company will normally apply the statutory ceiling laid down in the Employment Rights Act 1996.

OR

[if Company enhanced scheme stipulate arrangements.]^[8]

13. Appeal

All employees will have the right to appeal against dismissal for redundancy and to exercise this right must formally lodge an appeal, addressed to …….. within [5] working days of receipt of notice of redundancy. The employee will be invited to an appeal hearing – this will be held at a reasonable time and place. The employee will have the right to be accompanied by a fellow worker or trade union official of their choice. The rights of the companion are as detailed in Point 9 above.

The Appeal hearing will be heard by the …….. (or nominated deputy) within …. days of receiving the appeal in writing. The grounds of appeal will be carefully considered and the employee will be given an opportunity at the appeal hearing to present their reasons for appealing and to state their case. The outcome of the appeal hearing will be final.

14. Right to time off to seek other employment

Subject to the company’s operational needs, employees will be given permission to take reasonable time off work during their notice period to look for work or seek retraining opportunities in accordance with current legislation. Evidence of interviews/training may be required and permission must be sought in advance.

15. Status of procedure

The company reserves the right to depart from this procedure where circumstances demand it and to review and vary this policy from time to time.

^[1] Using age itself, nearness to retirement age, or financial cost as criterion is unlikely to be justified because there are viable alternatives which are non discriminatory or less discriminatory.

^[2] A Step One letter should always be sent in the event of 19 or less redundancies to comply with the Statutory Dispute Procedures. Employers need to decide whether they are going to apply the procedure to 20 or more redundancies and where there is an issue should contact EEF Northern for advice.

^[3] Employers need to be aware of Age Discrimination Regulations

^[4] Some employers, often by virtue of a collective agreement, use LIFO as the sole criterion for redundancy selection. LIFO is an objective and transparent method of selecting for redundancy and is frequently regarded by employers and employees alike as a ‘felt fair’ method.

LIFO does, however, present difficulties in the context of age discrimination, because it has the potential to treat one age group of employees less favourably than those of another age group. In many workforces is quite likely that the older the employee, the longer his or her service is. In such workforces the application of LIFO puts younger employees at a disadvantage in comparison with older employees.

In our view if you use LIFO as the sole criterion to select for redundancy and there is a difference in ages between short and long-serving employees in your workforce then you risk unlawfully discriminating on the grounds of age because it will be difficult to meet the test of justification. (See: Avoiding Age Discrimination, ‘A Practical Guide To Managing a Changing Workforce’ Chapter 9)

That said, you may have reasons why you want to use or keep using LIFO. If you decide to use LIFO for redundancy selection (which as highlighted above, is a risky strategy) then we recommend that you assess and document your justification at the time you make the decision.

^[5] Length of service is often used not as the sole criterion for redundancy selection, but as one of a number of criteria in a matrix, or as a ‘tie-breaker’ where employees’ scores on other criteria are equal. However this is likely to be age discriminatory.

Where scores are equal and length of service is the determining factor in making the selection, this will place the younger employees in the pool at a disadvantage in comparison to older employees, if overall the younger employees have less service than older employees. In such circumstances, the use of length of service must be justified to avoid unlawful discrimination on the grounds of age. (See: Avoiding Age Discrimination, ‘A Practical Guide To Managing a Changing Workforce’ Chapter 9)

^[6] If the company identifies a “suitable” alternative role for an individual and the employee decides they do not want to undertake this role, then they will resign from the company – there will be no redundancy and as such no redundancy payment. A role is considered to be a “suitable” alternative if there is no change in earnings, terms & conditions, status, level of responsibility.

^[7] Following the completion of a successful trial (by both parties) there is no redundancy payment made to the employee if they continue in the alternative role.

^[8] In the context of age discrimination, the vital issue is whether the basis for the enhancement relies to any extent on the age of the employee. If the enhancement is determined by direct reference to the employee’s age, or indirectly by reference to the employees length of service, then there is a risk that it will fall foul of the age discrimination legislation. However, not all age-related schemes are rendered unlawful by the legislation. The regulation contain specific exemption for enhanced redundancy schemes that mirror the statutory redundancy payment scheme. Please seek advice from the EEF.