Redundancy payout

[JustFlynn]

Hi, I'm seeking a legal answer as to whether the changing of my employee contract and employee handbook was carried out in a legal transparent and fair way. Briefly I had a contract of employment for 19 years and 8 months which had a policy offering an enhanced payout in the event of being made redundant. Less than 6 months before being made redundant we were issued with new contracts and a new employee handbook which omitted the Redundancy policy. Whilst we were consulted on the new contract and directed to check the contents of the new policies we were never informed that policies would be omitted. Is there a requirement for an emoyer to consult with emoyees on omissions an addition to new policies? My redundancy payout as a result of this "sly & underhand" approach has left me with losing 74% of what I was expecting to receive.Morally wrong but is there a legal argument to support a claim. The new contract was signed as to not sign was not an option.

[ULA]

Sorry to hear about your situation.

Employers can make changes to contracts of employment to meet changing demands of the business but in doing so need to follow a fair process to implement a significant change in terms and conditions so, they need to fully consult with you and agree any changes. It would appear from what you have said your employer did go through a process of consultation, however it would appear the question is around how thorough that process was.

Relating specifically to the redundancy payment:

1. Can you confirm whether the original enhanced payout was part of a separate policy and not contained in your original contractual terms of employment?
2. Can you confirm, if it was in a policy, whether the origanl document was stated as being contractual or non-contractual? Typically policies are non contractual and can therefore be changed much more easily and without the need for consultation.

[JustFlynn]

Hi, I'm seeking a legal answer as to whether the changing of my employee contract and employee handbook was carried out in a legal transparent and fair way. Briefly I had a contract of employment for 19 years and 8 months which had a policy offering an enhanced payout in the event of being made redundant. Less than 6 months before being made redundant we were issued with new contracts and a new employee handbook which omitted the Redundancy policy. Whilst we were consulted on the new contract and directed to check the contents of the new policies we were never informed that policies would be omitted. Is there a requirement for an emoyer to consult with emoyees on omissions an addition to new policies? My redundancy payout as a result of this "sly & underhand" approach has left me with losing 74% of what I was expecting to receive.Morally wrong but is there a legal argument to support a claim. The new contract was signed as to not sign was not an option.

Hi, thanks for the response. The answers to your questions are:

1. Yes, the Redundancy policy, see below, was contained within a Staff Handbook and was not contained within my contract 3.4 Redundancy Policy

The company policy is to comply with the law both in letter and in spirit. The company will provide compensation as set out below to employees who continue their' employment up to the official termination date or else leave earlier with the agreement of the company. In all cases the provisions of the Employment Rights Act will apply:-

1. 1 week's pay for each year of service below the age of 30.
2. 2 weeks' pay for each year of service between the ages of 30 and 40.
3. 3 weeks' pay for each year' of service beyond the age of 40,

In calculating redundancy 1 week's pay will be the average of the 12 weeks' gross pay prior to the date of termination of employment.

2. There is no statement within the Handbook to state it's contractual or otherwise but it does state the following "The terms herein do not replace terms and conditions of employment as may be agreed within any individuals Contracts of Employment."

We were consulted with solely on the contents of the new policies that form the new Employee handbook and not the contract itself. At the time, although I only learned of this later on, the new CEO received a query about what the redundancy policy going forward would be as there was no mention of redundancy either in the new handbook as a policy or the new contract. The response was they could not imagine that the old handbook would have contained a redundancy policy. It did, as pasted above so was there a responsibility for the CEO to check the facts, provide a proper answer and to be open and transparent with all employees if making such a significant change. In implementing this significant change there was no communication that this policy was to be removed and on being questioned about it a totally unsatisfactory answer was provided which was misleading.

I suppose my follow on questions are

1. If the policy within the Handbook states it is to "comply with the law" does that make the policy contractual?
2. Have we the employees been misled by the company in a) lacking transparency in their communications in not mentioning the removal of this policy and b) not acknowledging that a Redundancy policy existed.

Regards,

Justin

[ULA]

In answer to your questions:

1. No it does not mean that it is contractual it just means that it complies with employment legislation. If contractual terms are lesser than employment legislation then the latter will prevail.

2. The requirement for consultation is for changes to contractual terms. If non contractual policies are changing or being removed then ideally notice should be given to staff of these also confirming when they will be implemented but there is no requirement to consult and gain agreement for the changes.

Again ideally the CEO shoukd have checked facts first before responding particularly as they were new.

I have a further question for you when did the redundancy occur?

[JustFlynn]

Hi,

Thanks again. I was made redundant on March 25th. The new contract was signed Sep 28th 2021. The removal of the redundancy policy was cincealed

[JustFlynn]

Your contract will cover working hours, pay, sickness, pension scheme, holidays and any period of notice required. A Contract of Employment is an agreement between an individual employee and xxxx and there may be additional clauses or benefits, which relate to you specifically. These will be included in your contract, although you are still subject to the rules, policies and procedures of the company as set out in this Staff Handbook,

[ULA]

Your post #6 is fairly standard in terms of what your contract covers but also referring you to the policies and procedures in the handbook which are also relevant to your employment. As I have already stated non-contractual policies/procedures can be updated without consultation, however good practice would be to inform employees when changes are made. In this case it would have been to notified that from xx date the enhanced redundancy terms were being removed and only statutory redundancy payments would be made in the event of a redundancy situation.

Are you a member of the union?

How many of you were made redundant?

[JustFlynn]

Hi, I'm looking at this from a different angle now. The company has not followed good practice but I'm guessing they have not acted outside the law in not being open and transparent with us. Two of us were made redundant out of 15, two further people resigned with 1 of them negotiating a deal.

The following clause is in my new contract.
25.1 This Contract supersedes all previous agreements and arrangements (whether oral or in writing) in relation to any of the matters dealt with in it.

Is it legally correct to interpret this as follows?
Only those matters that are dealt with within the new contract supersede previous arrangements and agreements. For example there is a clause in the new contract that deals with holidays so this new clause supersedes the holiday clause in my original handbook.
The new contract and new Handbook does not deal with Redundancy; there is neither a clause in the contract nor a Redundancy policy in the handbook. As this matter is not dealt with I can't see how the Redundancy policy is superseded and would it be correct to expect the original redundancy policy to remain in place?

Regards,

Justin

[ULA]

Clasue 25.1 is quite standard when a new contract is being issued as in your case and it refers to the contractual terms of the employment contract.

That clause is not referring to any policies/procedures contained within the Handbook which unless you can categorically state otherewise does not form part of your contract.

[JustFlynn]

Hi, I'm contesting a redundancy payout where I received statutory redundancy after 20 years. The company has the following policy which I've pasted below and I've highlighted the following wording "In all cases the provisions of the Employment Rights Act will apply" and they argue that the inclusion of this wording caps the payout at the statutory amount despite the Policy clearly stating the company will provide compensation based on the enhanced calculations shown in a - c. Are they trying to pull the wool over my eyes or is it possible that they have created a policy to give the impression that Redundancy payment will be enhanced and then the inclusion of this wording effectively removes the enhanced provision promise?

Thanks,

Justin

Redundancy Policy
The company policy is to comply with the law both in letter and in spirit. The company will provide compensation as set out below to employees who continue their' employment up to the official termination date or else leave earlier with the agreement of the company. In all cases the provisions of the Employment Rights Act will apply:-

1. 1 week's pay for each year of service below the age of 30.
2. 2 weeks' pay for each year of service between the ages of 30 and 40.
3. 3 weeks' pay for each year' of service beyond the age of 40,

In calculating redundancy 1 week's pay will be the average of the 12 weeks' gross pay prior to the date of termination of employment.

To be clear their argument is that irrespective of what they have stated they will provide as compensation in the event of redundancy the mere fact that they have added the above wording negates what they have stated. It appears to be a ridiculous argument but I'm unfamiliar with the law.

My expectation was that I would have received 9 weeks at twice my full weekly pay and 11 weeks at three times my weekly pay. How could adding 'in all cases the provisions of the employment rights act will apply' render their policy null and void? What is the point of providing an enhanced redundancy policy if the next statement removes it?

I suppose the question I should be asking is, does the inclusion of this statement (In all cases the provisions of the Employment Rights Act will apply) mean that at the very least statutory is payable but where they have provided a policy for an enhanced payout they are obligated to pay the enhanced amount?

[ULA]

Hi JustFlynn does this relate to your thread Redundancy payout - LegalBeagles Forum if so then I will merge the threads. It is more helpful to those of us providing advice to have all the information on one thread.

[JustFlynn]

Hi, yes it does - I realised I had not posted it within the Employment section where it should have been posted originally.

Thank you

[ULA]

RESPONSE FROM atticus ON DUPLICATE THREAD NOW TRANSFERRED TO THIS CORRECT THREAD

"That wording contains no suggestion of a cap: the last sentence could not be clearer."

[JustFlynn]

Hi atticus

To be clear their argument is that irrespective of what they have stated they will provide as compensation in the event of redundancy the mere fact that they have added the above wording negates what they have stated. It appears to be a ridiculous argument but I'm unfamiliar with the law.

My expectation was that I would have received 9 weeks at twice my full weekly pay and 11 weeks at three times my weekly pay. 20 years employment from age 31 to 51. How could adding 'in all cases the provisions of the employment rights act will apply' render their policy null and void? What is the point of providing an enhanced redundancy policy if the next statement removes it?

I suppose the question I should be asking is, does the inclusion of this statement (In all cases the provisions of the Employment Rights Act will apply) mean that at the very least statutory is payable but where they have provided a policy for an enhanced payout they are obligated to pay the enhanced amount?

[atticus]

It seems to me that if they are saying their policy will be applied, then your interpretation (and mine) is the better one, for the reason I have given.

Or are they saying they will not apply that policy, but simply use the statutory calculation?

Whether the policy has contractual effect is for a more specialist employment lawyer than me.