Business Restructure/ Redundancies

[Red Jim]

Good afternoon

I am hoping that someone can give me some advice...

I work for a very large corporate IT company in an external business development role, and have done for seven years.

The wider business is currently experiencing serious financial difficulties and redundancies have now filtered down to my level. Given the huge profitability of my particular business unit, I’m assuming that this is just to either streamline or make ready for sale.

Either way, the writing appears to have been on the wall for some time. A new management team was out in place earlier this year and have slowly been making cut backs as well as hiking our targets to a seemingly unacheivable level. Nearly all staff members are struggling to get anywhere near these targets. In addition to this, we have had much of our potential customer based taken away and given to other teams and a new commission scheme has been introduced that pays us less if we are not on track to achieve at least 80% of the target. This all feels like an attempt to squeeze us to the point of seeking alternative employment.

I have just been warned by a colleague that there will be a new wave of redundancies in the coming weeks that will likely target the team I am part of.

My contract states that I would only be entitled to 1 weeks wages for every year that I have been there (7).

Any advice on what my rights are, if this is strictly legal, what I can challenge or insist upon, etc would be very much appreciated.

its worth mentioning that I have an almost perfect record in terms of both attendance and hitting targets.

Many thanks in advance

James

[ULA]

When making redundancies a company does need to follow a process of consultation and dependent on how many people are being made redundant their is a timescale for consultation to take place. I can provide more detail on what the company should be doing in accordance with this process if you require.

Redundancies are a form of dismissal and can happen when an employee's job no longer exists. This may be due to an employer needing to reduce their workforce, closer the business or certain work is not longer needed.

In terms of any redundancy payment there is a clearly defined formula for statutory redundancy to compensate you for the loss of your job and this is based in completed years of service and age, based on half a week's pay (capped at £508 per week) for each year you were under age 22, one week's pay for each year you were 22 and older but less than 41 and one and a half weeks for each year you were 41 or over. If your company does not require you to work your notice then you would be entitled to one weeks notice per year of service and in addition you should be paid any holiday accrued pro-rata up to your leaving date that you have not taken.

[Red Jim]

Thanks very much for your response.

I’m also interested in finding out what is and isn’t fair. As I said, earlier this year we had our targets put up by around 35%, our internal colleagues (helpers) taken away and much of our potential opportunity taken away and given to another team. At the same time, they implemented a new process that automatically puts us on a disciplinary if we don’t hit target for 3 consecutive months. The targets are ridiculous and as such approximately 90% of staff will fall under this after the current month. The changes have also halved our commission earning potential.

This all feels like a very underhand way of either pushing staff out or getting them into a position where they are easily gotten rid of.

A colleague approached HR to find out if this was legal and was told yes it is, as all staff have been levied with the same changes.

Can they really get rid of people based on under performance when the business has clearly manoeuvred staff into meeting the criteria for disciplinary action? And are they completely within their rights to severely decrease earning potential by implanting huge targets, less opportunity, less support and decreasing income on lower target achievement?

thanks again for your help.

[ULA]

It sounds like the company is undergoing a bit of a tough time and is introducing new working practices to try and "turn the tide". As such the company can restructure how the work is carried out within the business.

In terms of commission and targets the schemes under which they operate are usually non-contractual i.e. a contract will say that you get commission based on achieving certain targets but those targets and commission payments are not contractually set out in order that company's have flexibility to change them according to the needs of the business. However it would be useful for you to review any commission scheme documentation that the company has in place. In addition commissions, unless contractual, are not deemed to be a guaranteed part of your salary.

I appreciate this may not be exactly what you want to hear. However, due to your length of service and to avoid any potential claims they would need to follow defined process either in terms of any declared redundancies in your team or any disciplinary action taken as a result of under performance due to not meeting new targets. I should also point out that any changes introduced to targets/commission payments should be done so by the company giving reasonable notice and followed up in writing.

You do also have the option to discuss any concerns you have either with your line manager or HR.

[Red Jim]

Thanks once again ULA. No, not what I wanted to hear, but good to understand. It doesn’t sound like there’s any scope to challenge what they are doing. It’s probably time to get job hunting.

I really appreciate your responses.

[ULA]

Wish you the best of luck.

As I said though if the company does take action of some sort there is a process to be followed and you can always pop back here if you want to check anything with us.

[Red Jim]

Thank you

[Red Jim]

Hello again.

One more question if I may;

I have now found another job and handed my notice in last Friday. I was told that I have accrued 9 days holiday, and as such could leave on the 25th. Am I right I’m assuming that I will still be paid for the 9 days? In my mind, I’m leaving 9 days early but they will be holiday days that I am owed, so should be paid for this.

Many thanks

[ULA]

Yes you are correct you will get the nine days holiday paid.

Best of luck in your new job.