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Consultation to reduce size of redundancy payment.

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  • Consultation to reduce size of redundancy payment.

    Hi.

    I work for a large UK based charity that has been on a recent efficiency drive and implemented a number of consultation where redundancies have resulted.

    Our department has so far avoided these redundancies. This is probably because we have a number of employees who have served many of years service, making it quite an expensive exercise for the organisation to undertake.

    Long term employees (those who started before 2004) currently have a far better provision for redundancy than those who started after. Last week we received a consultation saying that they would like to make everyone's redundancy calculations the same (government statutory) throughout the workforce and listed some weak reasons why they need to do this (I can post these if needed). The result of this is that should I be made redundant, my payment would be reduced by around 75% from what it is now.

    Should it be successful (which I assume it will be), this proposal will be implemented on the 1st of June 2018, so my question is: legally is there any reason why my organisation can't implement this and make people redundant very soon after? Or arguably start a consultation before (Easter?) scheduling redundancies for the implementation date.

    Knowing how the organisation has been run since our latest CEO has been employed, I suspect this is really them saying "we want to make you redundant, but don't want to stick to our side of the bargain". To me it all seems a bit fishy and question the legality behind it.

    Any feedback would be very much appreciated.

    Thanks in advance
    Dave.
    Tags: None

  • #2
    Re: Consultation to reduce size of redundancy payment.

    Tagging [MENTION=51026]Ula[/MENTION] [MENTION=26290]mariefab[/MENTION] ... they should be able to explain the legalities for you xx
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    • #3
      Re: Consultation to reduce size of redundancy payment.

      Were the pre 2004 terms detailed in either of your contract of employment, redundancy policy that forms part of your contract or part of a collective agreement with a union? Just asking so that I can understand what process they may need to adopt to make the change.

      I presume that one of the main reasons they want to make the changes is financial??

      In answer to your specific question no of they did make the changes next June and subsequently started a redundancy process thereafter then it would be on the new payment terms. In regard to starting "a consultation before (Easter?) scheduling redundancies for the implementation date" from my perspective they could open themselves up to some issues about the fairness of the process in light what would be the imminent "implementation date". If I was advising your employer then I would say no don't do it but I am not your employer and they may be willing to take the chance.
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      • #4
        Re: Consultation to reduce size of redundancy payment.

        Originally posted by Will123456 View Post
        should I be made redundant, my payment would be reduced by around 75% from what it is now... Should it be successful (which I assume it will be), this proposal will be implemented on the 1st of June 2018, so my question is: legally is there any reason why my organisation can't implement this and make people redundant very soon after?
        Hi,

        "Should I, Should I" seems to be the theme of your post here... Later in this reply there will be another "Should I"...

        Fundamentally a contract of employment is a deal between two, empowered, informed parties (OK, OK, stick with me on this...).

        The "deal" that induced you to join this outfit in the halcyon days of 2004 (if only we had know how lucky we were) included the reassurance that in the event of your redundancy you would be cushioned by these generous terms. Without that promise you may well have joined another charity or whatever.

        Now the firm want to change the deal. You can say "NO" clearly and consistently and start saving up your money, cutting back on your hols, keep the older car, buy fewer shoes and handbags (or season tickets and beers, pick your sexist stereotype...).

        Because you will need all your Financial Firepower to have the confidence to be willing to RESIGN and seek compensation for either Constructive Dismissal or Breach of Contract.

        "Should you??" Only you know how much fight you have in you and if that is worth having "last year's colours" and seeing your team on Sky rather than "with the lasses" (see what I did there...) ��

        Viking

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        • #5
          Re: Consultation to reduce size of redundancy payment.

          Viking, you do have a special way of putting things... not sure it always comes across as you mean it, which I'm sure is with the best intentions, but can come across a little harsh - just something to bear in mind xxx

          I think what you might be saying is that if the company want to change the redundancy policy through consultation, then the OP won't have a lot of choice but to go along with the result of that consultation, regardless of how unfair it seems, as the alternative is leaving the job via resignation and then attempting a claim for constructive dismissal - or the employer dismissing employees who don't agree to the change and hoping the unfair dismissal claims would come to less than the redunancy payments.

          It does sound incredibly unfair. I do think it is wise though for the OP to try and find out the exact legality of making such a huge change to terms, even via consultation, when it does seem it is pre-empting redundancy of employees who would otherwise have been entitled to much larger redundancy payments.

          Originally posted by Ula
          Were the pre 2004 terms detailed in either of your contract of employment, redundancy policy that forms part of your contract or part of a collective agreement with a union? Just asking so that I can understand what process they may need to adopt to make the change.
          Originally posted by Will123456
          listed some weak reasons why they need to do this (I can post these if needed)
          I think that may help along with the queries Ula has above.
          “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

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          • #6
            Re: Consultation to reduce size of redundancy payment.

            Originally posted by Amethyst View Post
            Viking, you do have a special way of putting things...which I'm sure is with the best intentions, but can come across a little harsh - just something to bear in mind xxx
            Yeah, not disputing the point... Direct was always the Viking Way...

            Let's do a deal. I'll be Bad Cop. Often wrong but always honest.

            The rest of the Beagles can be Good Cops.

            Posters; help our learning here. When your problem is resolved OR explodes in your face return to the thread and give us all some "completion".

            I hope to be wrong.

            Viking

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            • #7
              Re: Consultation to reduce size of redundancy payment.

              Hi

              Thanks everyone for taking the time to respond (and Viking, you can be as direct as you like!)

              From my point of view I’m not waiting for redundancy and should it come I would hope that with my particular skill set I could move on reasonably quickly. I think most people who it affects have taken offence to the way in which this has been implemented. Our workplace has recently become accustomed to badly run consultations, dwindling benefits and redundancies and this really does feel like a bit of a cynical move to change the goal posts for the organisations benefit.

              Personally I can understand why the organisation would want to do this, and had they said that this would be implemented in 36 months rather than the proposed 7, I would have been far more understanding. This way, the staff could have confidence that organisation will not be in a position to make strategic or budgetary driven redundancies soon after its implementation.

              Anyway in response to the questions, as far as I understand it the redundancy calculations are not contractual, but a based in policy which at some point in time was updated to leave a two tiered system (pre and post 2004).

              The reasons given are as follows:

              Age Discrimination – The pre-1st April 2004 scheme could be age discriminatory. Under the Equality Act, and the Employment Equality (Age) Regs (Northern Ireland), employers are allowed to offer an enhanced redundancy pay scheme provided that it is still based on the statutory scheme. You can, for example, treat a week's pay as being uncapped or subject to a maximum amount above the statutory limit.

              The pre-1st April 2004, however, deviates from a permitted scheme by giving additional enhancements based on length of service that are most likely to unfairly advantage older employees over our younger employees and therefore could be age discriminatory.

              Consistent Treatment of Employees - In general, the fact that we have two different schemes in existence, one of which is considerably more generous than the other, means that we are not treating all of our employees consistently in a redundancy situation.

              Responsible Stewardship - We have always striven to recognise and value the loyalty and commitment of long-serving employees, in line with our Basis and Values. In 2004, we had to revise the redundancy scheme for new employees due to the significant financial costs of trying to maintain the pre-2004 terms on an ongoing basis for all staff.

              The very different, and unforeseen, economic factors that have developed since 2008/9 also cause us to further challenge whether the legacy ex-gratia redundancy payments, for staff that joined before 1st April 2004, can still be maintained.


              Thanks again.

              Comment


              • #8
                Re: Consultation to reduce size of redundancy payment.

                Originally posted by Will123456

                From my point of view I’m not waiting for redundancy SEE POINT AT BOTTOM OF POST and should it come I would hope that with my particular skill set I could move on reasonably quickly... Our workplace has recently become accustomed to badly run consultations, dwindling benefits and redundancies and this really does feel like a bit of a cynical move to change

                Age Discrimination – The pre-1st April 2004 scheme could be age discriminatory.

                If so, it has been so since 2010 Equalities Act OR was wrong on day one. Why now?

                The pre-1st April 2004, however, deviates from a permitted scheme by giving additional enhancements based on length of service that are most likely to unfairly advantage older employees over our younger employees and therefore could be age discriminatory.

                See point above: why now?

                Consistent Treatment of Employees - In general, the fact that we have two different schemes in existence, one of which is considerably more generous than the other, means that we are not treating all of our employees consistently in a redundancy situation.

                You don't have to treat equally, so long as not discriminating. Look up "Bumping" in redundancy situations and be prepared to fall off your chair...

                Responsible Stewardship... unforeseen, economic factors that have developed since 2008/9 also cause us to further challenge whether the legacy ex-gratia redundancy payments, for staff that joined before 1st April 2004, can still be maintained

                AHHHHHHH NOW WE HAVE IT! .
                Be afraid; very afraid. And be prepared to assert your rights OR ask NOW for a Without Predudice Conversation to see if they will pay you off, get that job your skill set allows... Settlement agreements can be good for all, do make sure you keep it confidential, if they think everyone will ask you might not get yours...

                Viking

                Comment


                • #9
                  Re: Consultation to reduce size of redundancy payment.

                  Thanks for the response Viking. I’ll be asking some questions along those lines and feedback the responses.

                  Another point that keeps on coming up runs along the theme of: is there a point that this policy would be considered contractual? (considering the length of time that it has been in place and the fact that we are having a consultation regarding it).

                  Thanks again for the reply’s, everything helps.

                  Comment


                  • #10
                    Re: Consultation to reduce size of redundancy payment.

                    Originally posted by Will123456 View Post
                    is there a point that this policy would be considered contractual? (considering the length of time that it has been in place
                    Hi,

                    The general point (as I understand it) is that it is easier for terms to become implied into contracts when the contract is SILENT on the matter, so, does the contract say anything about redundancy terms??

                    If not... you might consider "asserting" that the policy has "become an implied term" of your contract, maybe by sending an email to HR or in a Grievance.

                    Tip. Maybe avoid the term "custom and practice". 1. It is not quite the correct concept, more linked to a whole industry / sector imho. 2. It makes you sound like throwback to the 1970s...

                    Viking

                    Comment

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