Recent events have demonstrated that the Government’s draft Statutory Code on Dismissal and Re-Engagement is more necessary than ever as tales of poorly handled mass redundancies continue to hit the headlines.

Following a brutal set of tech company lays offs towards the end of 2022, 2023 has continued to see worldwide staff cuts from some of the biggest names in the industry, including Google, Microsoft, META, Twitter, Shopify, Salesforce and Zoom.  

The mass culling has resulted in tens of thousands of workers losing their jobs over the past few months, with various factors being blamed. The war in Ukraine and inflation have both been cited as reasons, as has the cost of living crisis along with an over-hiring culture during the Covid pandemic. These factors will inevitably result in mass unemployment over the coming months as companies manage those issues.

Whatever the rationale, the consensus across the board is how badly the communication with affected employees has been handled. 

Horror stories are growing on how workers found out they lost their jobs, from messages via LinkedIn to cold round-robin emails and auto shut-out of work tools and company systems. One worker only found out they lost their job when their key-card failed to let them in the building.

Currently, companies that operate in the UK need to follow redundancy procedures under UK law. The rules are governed by the Collective Consultation Process, which you can read more about in our helpful blog – What is The Collective Consultation Process?

Dismissal and Re-Engagement – New Statutory Code

The issue of how companies handle mass redundancies first came to light at the beginning of last year when P&O Ferries dismissed almost 800 members of their staff with immediate effect. The fallout from this sparked a furious debate surrounding employment law and the legality of this action.

You can read more about the P&O Ferries redundancies by clicking reading our useful blog – P&O Ferries’ Redundancies- What is the legality of mass redundancy?

On the back of this, the Government announced a new Statutory Code on dismissal and re-engagement (‘fire and rehire’) would be published. The plans aim to crack down on unscrupulous employers that use controversial dismissal tactics.

The draft Code outlines employers’ responsibilities when seeking to change contractual terms and conditions, including requiring businesses to “consult with employees in a fair and transparent way” when proposing changes to their employment terms. The Code sets out employers’ responsibilities when seeking to change employment terms and conditions, It requires employers to explore alternative options, without using the threat of dismissal to pressure employees to agree new terms.

Tribunal courts already have the power to apply an uplift or decrease of up to 25 per cent on employee compensation in certain circumstances and if an employer doesn’t follow the new code it is expected that the guideline may be extended to allow the same if Companies fail to actively consult.

A draft copy of the Code of Practice was published at the start of this year (on 24 January 2023), and the Government is consulting on it for 12 weeks until 18 April 2023. 

Business Secretary Grant Shapps said: “Using fire and rehire as a negotiation tactic is a quick-fire way to damage your reputation as a business. Our new code will crack down on firms mistreating employees and set out how they should behave when changing an employee’s contract.”

“We are determined to do all we can to protect and enhance workers’ rights across the country.”

Individuals or groups interested can participate in the consultation: Draft Code of Practice on dismissal and re-engagement.

Employment Law Solicitors 

If you are an employer and are concerned that you might need to make some of your workforce redundant, please don’t hesitate to contact one of our team. At Eric Robinson Solicitors, our highly experienced employment law team can advise employers faced with a redundancy situation to ensure they are following the proper and lawful processes.

Equally, if you are an employee who has been made redundant, but you believe that there was another reason for your dismissal or the correct procedures were not followed, we can advise you on whether you have an employment tribunal claim for unfair dismissal.

To discuss an employment law issue or dispute, don’t hesitate to get in touch with us today.

This blog post is not intended to be taken as advice; information could have changed since the article was published. If you are seeking legal advice, please get in touch with our team of solicitors to discuss your matter. 

Recently, Meta, the social media giant which owns brands such as Facebook, Instagram, and WhatsApp, made headlines with the announcement about their substantial employment cuts, removing a reported 13% of its workforce (around 11,000 employees).

However, there are others. Major companies, including Amazon, Netflix, Twitter, and Tesla, have also made similar large-scale redundancies in the last year.

In a statement regarding the Meta layoffs, Zuckerberg put it down to overestimating the accelerated growth seen during Covid.

“Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.”

Meta has a global workforce, and according to the most recent Companies House filing, they employed over 5,000 people in the UK as of December 2021, with additional local reports stating they directly employ a further 3,000 people, plus many more contractors in Dublin.

So far, they have declined to confirm the number of redundancies for each country. Still, due to the potentially large number of redundancies across the UK, Meta will need to follow correct redundancy procedures under UK employment law.

And this will go for any UK employer considering staff cuts, as businesses must follow a minimum procedure before dismissing any employees.

In this article, our Employment Law team takes a closer look at the Collective Consultation Redundancy process, with some guidance on the procedures involved.

What is Collective Consultation?

Collective consultation is the mandatory process that must take place between an employer and any employees – or their representatives – who are affected by a potential large-scale redundancy, from one establishment, within a set period.

Under UK employment law, ‘collective consultation’ rules must apply in cases where an employer plans to make 20 or more employees redundant from a single establishment within 90 days.

If these procedures are not followed correctly, the redundancies could be deemed unfair, resulting in an potential employment tribunal claim against the employer.

What is involved in the Process?

The Collective Consultation process does not have to result in an agreement. Still, employers are advised to carry it out with a ‘view to reaching it, including ways of avoiding or reducing the redundancies’.

Collective Consultation rules state that employers must include these steps:

• Notify the Redundancy Payments Service (RPS) before consultation starts by filling out form HR1. Deadlines apply and depend on the number of staff affected. The form contains information about where to send it.
• Consult with the trade union representatives, elected employee representatives or directly with the staff concerned.
• Inform the representatives or the affected staff about the planned redundancies, giving them enough time to consider them.
• Respond to any requests for further information.
• Give any affected staff termination notices, providing the agreed leaving date.
• Issue redundancy notices once the consultation is complete.

What are the deadlines for notifying the Redundancy Payments Service (RPS)?

The deadline for notifying RPS depends on the number of proposed redundancies.

If you plan to make 20 to 99 employees redundant, you must submit your form at least 30 days before the date of the first redundancy. For cases with 100 or more proposed redundancies, the deadline falls 45 days before the first redundancy. 

It is important to note that failure to notify the RPS could result in an uncapped fine.

How long should the consultation process last?

Although there is no time limit on the length of the consultation process, there is a minimum period before an employer is allowed to dismiss any employees.

For 20 to 99 redundancies, the minimum consultation period before dismissal must be at least 30 days before the first dismissal. In the case of 100 or more redundancies, the minimum length of the consultation period is 45 days.

What information must an employer provide?

To ensure the correct redundancy procedures are followed, the written information an employer must provide to the employee or employee representative includes the following:

• the reasons for redundancies
• the numbers and categories of employees involved
• the number of employees in each category
• how you plan to select employees for redundancy
• how you plan to carry out redundancies
• how you will work out redundancy payments

To Summarise

Unfortunately, redundancies can be a common part of the business lifecycle, especially when the economy is facing difficulties.

However, if redundancy processes are dealt with incorrectly, employment tribunal proceedings may arise; therefore, it is vitally important that the procedure is administered correctly to protect the employer’s position and the employee’s rights.

Even where there is a genuine redundancy situation, an employer must follow a minimum procedure before it dismisses any employees.

Depending on how many employees are affected, as discussed in this article, employment law may require an employer to comply with special consultation requirements.

Specialist Employment Law Solicitors

At Eric Robinson Solicitors, our highly experienced employment law team can advise employers faced with a redundancy situation to ensure they are following the proper and lawful processes.

Equally, if you are an employee who has been made redundant, but you believe that there was another reason for your dismissal or the correct procedures were not followed, we can advise you on whether you have an employment tribunal claim for unfair dismissal.

To discuss an employment law issue or dispute, don’t hesitate to get in touch with us today.

This blog post is not intended to be taken as advice; information could have changed since the article was published. If you are seeking legal advice, please get in touch with our team of solicitors to discuss your matter. 

It is important to know your rights regarding a redundancy situation. 

If you believe you have been dismissed unfairly or the process was unfair our Redundancy Solicitors can help you with this and can represent you in a case at the Employment Tribunal.  For further information on how we can help you, please see our Employment Solicitors Services. 

It is also important as an employer to know the relevant bases that need to be covered, ensuring you meet the legal requirements, if you find your business is changing or closing and you need to consider a redundancy process.

The employment team at Eric Robinson have come up with a guide to help you as an employer to ensure that your redundancy process meets all the legal requirements. 

The following guide is aimed at organisations and firms looking to make more than twenty employees redundant

What is redundancy, and how can I prepare for it as a business owner?

Redundancy is where an employer needs to reduce their workforce. An example is if the business is closing, or specific roles are no longer required.

If you are an owner or manager of a business and you are concerned about a downturn in trade, it is crucial to consider the following:

• Is there sufficient income to pay wages and keep the company afloat?
• Is there enough work to keep your staff busy

Your thoughts may turn to making redundancies to reduce the number of staff members you employ to cut costs. This can be a daunting prospect which will affect you and your employees as you will be required to hold genuine and meaningful consultations.

Redundancies can often occur when the amount of work completely disappears or if the workload reduces. It can either be voluntary or compulsory. Although it might seem legalistic, you must ensure you meet the legal requirements if your business appears to be changing or closing altogether.

If you are a small firm or a larger organisation proposing to make fewer than 20 employees redundant, it is important to consider how the law changes and how to handle small-scale redundancies and plan around them.

Redundancy Consultation

When it comes to redundancy, the right to be collectively consulted applies when an employer is looking to make 20 or more employees redundant in one company over a period of 90 days or less. 

Individuals also have the right to be consulted by their employers because a Tribunal may view it as unfair if employers only consult unions and not individuals.

The employer should undertake consultation to reach an agreement with appropriate representatives on issues like avoiding dismissals or reducing the number of employees to be dismissed. 

The duty applies even when the employees who are being made redundant are volunteers. If a company fails to comply with these consultation requirements, it could lead to a compensation claim.

When it comes to redundancy consultations, they should begin in good time and must be:

• At least 30 days before the first dismissal takes effect if 20 to 99 employees are to be made redundant at one establishment over a period of 90 days or less

• At least 45 days before the first dismissal takes effect if 100 or more employees are to be made redundant at one establishment over a period of 90 days or less 

The Redundancy Procedure

Employers should consider establishing a formal redundancy procedure to be negotiated and agreed upon with a Trade Union or employee representatives. 

It is important to have full and effective consultation when drawing up a redundancy procedure. The process is designed to allay unjustified fears; this will also avoid the suspicion that redundancies are imminent and allow representatives to contribute to their views and ideas and have meaningful discussions on ways to avoid the Redundancy. 

The procedure could be incorporated into the company handbook. Employees could be led to make claims for unfair dismissal if you fail to comply with a reasonable procedure in respect of the Redundancy.

The contents of a formal procedure on redundancy should contain the following elements (depending on the size and nature of the company):

• An introductory statement of intent towards an employee maintaining job security when practicable

• Full details of consultation agreements with the trade unions or employee representatives

• Which measures will be put in place to try and minimise or avoid the compulsory redundancies

• Overall guidance on the selection criteria and any skill matrix that will be used

• Severance terms details (i.e the redundancy package that is on offer)

• The discussion could lead to voluntary redundancy

• Meaningful consultations

• Suitable alternative employment offers

• Details of any appeals procedures

• Existing policy on helping the employees who have been made redundant to obtain training or seek alternative work to try and get them back into work as quickly as possible.

The measures for avoiding and minimising any future compulsory redundancies can include:

• Reducing overtime
• Recruitment restrictions
• Seeking applicants for voluntary redundancy
• Cost Cutting
• Salary reductions by agreement

Is there any information an employer must disclose about proposed redundancies?

In order to ensure their employee representatives can play a useful part in the consultation process over the proposed redundancies, the employer must disclose the following information in writing, which includes:

• Reasons for the proposed redundancies
• Numbers and descriptions of employees affected
• The method with which they will be carrying out the dismissals (taking into account any agreed procedures including the period that the dismissals will be taking effect)
• The method of selecting the employees who may be dismissed
• How the redundancy payments, other than the legal minimum, will be calculated.

Eric Robinson Employment Law Solicitors

At Eric Robinson, our specialist employment solicitors regularly advise clients who require representation in an employment tribunal. 

They will also provide expert advice on unfair dismissal, discrimination, or breach of restrictive covenants. Our lawyers regularly partner with employers and employees looking to reach a settlement agreement or when dealing with a redundancy process from both the perspective of the Employee and the Employer.

We are authorised and regulated by the Solicitors Regulation Authority, and our team is ready to work closely with you. We are here to understand your situation and to advise you on what to do next.

Call us today on 02380 218000 to book your initial consultation or make an enquiry by filling out our contact form. 

We also have solicitor offices in Southampton (Hedge End & Bitterne), Winchester, London (Richmond), Chandlers Ford and Lymington, and we can discuss fixed fee options and whether legal expenses insurance could be available to you.