Redundancy Question
Discussion
My mothers work is making some cutbacks, and there are to be redundancies. From what I gather, the current jobs will cease to exist and the staff (who aren't made redundant) will have to apply for another role with a lower salary and holiday.
What I dont understand is how they can change a contract like that with any redundancy payment? Surely they are canceling the old contract, and so the job, before issuing a new contract for a new job? How can they do this without making the staff redundant?
Sorry for not explaining myself very well, but any help/comments/law stuff would be much appreceiated.
What I dont understand is how they can change a contract like that with any redundancy payment? Surely they are canceling the old contract, and so the job, before issuing a new contract for a new job? How can they do this without making the staff redundant?
Sorry for not explaining myself very well, but any help/comments/law stuff would be much appreceiated.
As I understand it If you are made redundant you no longer have a job and are entitled to redundancy payment.
If there are other positions within the company you have a right to apply for those positions IF your qualifications and background as suitable you can apply.
Regardless of whether you are accepted for the new position you would still get your redundancy payment.
The new position would in it's own right have it's own contract which reflects that position.
Two different jobs two different contracts.
If there are other positions within the company you have a right to apply for those positions IF your qualifications and background as suitable you can apply.
Regardless of whether you are accepted for the new position you would still get your redundancy payment.
The new position would in it's own right have it's own contract which reflects that position.
Two different jobs two different contracts.
Big Al. said:
As I understand it If you are made redundant you no longer have a job and are entitled to redundancy payment.
If there are other positions within the company you have a right to apply for those positions IF your qualifications and background as suitable you can apply.
Regardless of whether you are accepted for the new position you would still get your redundancy payment.
The new position would in it's own right have it's own contract which reflects that position.
Two different jobs two different contracts.
So much is wrong with this but it's late and I am on an iPhone so will post tomorrow unless somebody else explains redundancy in the mean time. If there are other positions within the company you have a right to apply for those positions IF your qualifications and background as suitable you can apply.
Regardless of whether you are accepted for the new position you would still get your redundancy payment.
The new position would in it's own right have it's own contract which reflects that position.
Two different jobs two different contracts.
Current role is in a redundancy situation. The main options are:
1) You remain in current role, no change.
2) You exit the business via redundancy and are paid whatever eligible redundancy payments are available
3) Your current role is made redundant but you are redeployed to another role. This is not a termination of employment, your T&Cs may change and you would not be entitled to any redundancy payment as you have not been dismissed.
1) You remain in current role, no change.
2) You exit the business via redundancy and are paid whatever eligible redundancy payments are available
3) Your current role is made redundant but you are redeployed to another role. This is not a termination of employment, your T&Cs may change and you would not be entitled to any redundancy payment as you have not been dismissed.
edc said:
Current role is in a redundancy situation. The main options are:
1) You remain in current role, no change.
2) You exit the business via redundancy and are paid whatever eligible redundancy payments are available
3) Your current role is made redundant but you are redeployed to another role. This is not a termination of employment, your T&Cs may change and you would not be entitled to any redundancy payment as you have not been dismissed.
Thanks. So with option 3, they can change any T&Cs they wish, like pay? Sounds rather unfair to me.1) You remain in current role, no change.
2) You exit the business via redundancy and are paid whatever eligible redundancy payments are available
3) Your current role is made redundant but you are redeployed to another role. This is not a termination of employment, your T&Cs may change and you would not be entitled to any redundancy payment as you have not been dismissed.
TheLurker said:
Thanks. So with option 3, they can change any T&Cs they wish, like pay? Sounds rather unfair to me.
Yes, but it has to be a suitable re-deployment (for both parties). So if, for example, the re-deployed post is at a much different location or the pay differential is too great (ie too low), then the person would normally opt for redundancy. ACAS is definitely worth talking to for this.c8bof said:
TheLurker said:
Thanks. So with option 3, they can change any T&Cs they wish, like pay? Sounds rather unfair to me.
Yes, but it has to be a suitable re-deployment (for both parties). So if, for example, the re-deployed post is at a much different location or the pay differential is too great (ie too low), then the person would normally opt for redundancy. ACAS is definitely worth talking to for this.The test of whether it is indeed SAE is a common sense one, taking into account the factors above, and others.
OP, is the department/section of the business your mother works in being closed completely?
As edc has stated, if a suitable position with terms not hugely varied from current role is offered, she will be redeployed, not made redundant and re-hired. Redundancy payments are made when a role is made redundant and the person performing this role cannot be suitably redeployed within the business.
What is the 'lower pay' difference, in monetary terms? It would need to be significant to become a factor. Going from £25k a year to minimum wage for same hours per week significant.
The decision, if made solely on the redeployment role salary, should be factored against the job prospects of the employee in the current jobs climate also. Would the redundancy payment offset 12 months unemployment if no new job elsewhere can be found?
It is not an easy decision to reach, but the drop in income would need to be of such an impact that carrying out the role would have a negative financial impact to the employee to become a factor in redeployment being refused.
As edc has stated, if a suitable position with terms not hugely varied from current role is offered, she will be redeployed, not made redundant and re-hired. Redundancy payments are made when a role is made redundant and the person performing this role cannot be suitably redeployed within the business.
What is the 'lower pay' difference, in monetary terms? It would need to be significant to become a factor. Going from £25k a year to minimum wage for same hours per week significant.
The decision, if made solely on the redeployment role salary, should be factored against the job prospects of the employee in the current jobs climate also. Would the redundancy payment offset 12 months unemployment if no new job elsewhere can be found?
It is not an easy decision to reach, but the drop in income would need to be of such an impact that carrying out the role would have a negative financial impact to the employee to become a factor in redeployment being refused.
fergywales said:
OP, is the department/section of the business your mother works in being closed completely?
As edc has stated, if a suitable position with terms not hugely varied from current role is offered, she will be redeployed, not made redundant and re-hired. Redundancy payments are made when a role is made redundant and the person performing this role cannot be suitably redeployed within the business.
What is the 'lower pay' difference, in monetary terms? It would need to be significant to become a factor. Going from £25k a year to minimum wage for same hours per week significant.
The decision, if made solely on the redeployment role salary, should be factored against the job prospects of the employee in the current jobs climate also. Would the redundancy payment offset 12 months unemployment if no new job elsewhere can be found?
It is not an easy decision to reach, but the drop in income would need to be of such an impact that carrying out the role would have a negative financial impact to the employee to become a factor in redeployment being refused.
Thanks for the information.As edc has stated, if a suitable position with terms not hugely varied from current role is offered, she will be redeployed, not made redundant and re-hired. Redundancy payments are made when a role is made redundant and the person performing this role cannot be suitably redeployed within the business.
What is the 'lower pay' difference, in monetary terms? It would need to be significant to become a factor. Going from £25k a year to minimum wage for same hours per week significant.
The decision, if made solely on the redeployment role salary, should be factored against the job prospects of the employee in the current jobs climate also. Would the redundancy payment offset 12 months unemployment if no new job elsewhere can be found?
It is not an easy decision to reach, but the drop in income would need to be of such an impact that carrying out the role would have a negative financial impact to the employee to become a factor in redeployment being refused.
The redundancy package was 12 months salary (without tax) = £16K. My mother has now opted for this, but it is likely that it will not be accepted.
There is 'suitable position' in the company which she will be offered if redundancy is not accepted. This will be with a loss of pay of around £1K per annum and a reduction in leave from 30 days to 25 days.
From looking at the directgov website, the new role is only 'suitable' if it is similar to the old position. From what I can gather the wording of the new job description is almost identical to that of the current one, however, it mentions that the salary is a large factor in determining this. Would a ~6.5% decrease (£1K) in salary be considered to be reasonable? How about the reduction in leave?
Many thanks.
TheLurker said:
fergywales said:
OP, is the department/section of the business your mother works in being closed completely?
As edc has stated, if a suitable position with terms not hugely varied from current role is offered, she will be redeployed, not made redundant and re-hired. Redundancy payments are made when a role is made redundant and the person performing this role cannot be suitably redeployed within the business.
What is the 'lower pay' difference, in monetary terms? It would need to be significant to become a factor. Going from £25k a year to minimum wage for same hours per week significant.
The decision, if made solely on the redeployment role salary, should be factored against the job prospects of the employee in the current jobs climate also. Would the redundancy payment offset 12 months unemployment if no new job elsewhere can be found?
It is not an easy decision to reach, but the drop in income would need to be of such an impact that carrying out the role would have a negative financial impact to the employee to become a factor in redeployment being refused.
Thanks for the information.As edc has stated, if a suitable position with terms not hugely varied from current role is offered, she will be redeployed, not made redundant and re-hired. Redundancy payments are made when a role is made redundant and the person performing this role cannot be suitably redeployed within the business.
What is the 'lower pay' difference, in monetary terms? It would need to be significant to become a factor. Going from £25k a year to minimum wage for same hours per week significant.
The decision, if made solely on the redeployment role salary, should be factored against the job prospects of the employee in the current jobs climate also. Would the redundancy payment offset 12 months unemployment if no new job elsewhere can be found?
It is not an easy decision to reach, but the drop in income would need to be of such an impact that carrying out the role would have a negative financial impact to the employee to become a factor in redeployment being refused.
The redundancy package was 12 months salary (without tax) = £16K. My mother has now opted for this, but it is likely that it will not be accepted.
There is 'suitable position' in the company which she will be offered if redundancy is not accepted. This will be with a loss of pay of around £1K per annum and a reduction in leave from 30 days to 25 days.
From looking at the directgov website, the new role is only 'suitable' if it is similar to the old position. From what I can gather the wording of the new job description is almost identical to that of the current one, however, it mentions that the salary is a large factor in determining this. Would a ~6.5% decrease (£1K) in salary be considered to be reasonable? How about the reduction in leave?
Many thanks.
Can you expand on the job description being "almost identical"? Bearing in mind that a 'role' and not an 'employee' is made redundant, it is odd that she is being redeployed in to an almost identical position. Will she be carrying out a virtually identical role?
The difference in salary you have stated I would deem reasonable (Devil's Advocate: the company obviously have a financial or operational problem, and need to reduce overhead to continue trading. By paying lower salaries, they are reducing outgoings).
Has she questioned the loss of 5 days annual leave? I would recommend that she offers to accept if the annual leave remains unchanged (employment contracts are tailored, they do not have to be identical to all others of the same level in the business, and are confidential).
TheLurker said:
Thanks for the information.
The redundancy package was 12 months salary (without tax) = £16K. My mother has now opted for this, but it is likely that it will not be accepted.
There is 'suitable position' in the company which she will be offered if redundancy is not accepted. This will be with a loss of pay of around £1K per annum and a reduction in leave from 30 days to 25 days.
From looking at the directgov website, the new role is only 'suitable' if it is similar to the old position. From what I can gather the wording of the new job description is almost identical to that of the current one, however, it mentions that the salary is a large factor in determining this. Would a ~6.5% decrease (£1K) in salary be considered to be reasonable? How about the reduction in leave?
Many thanks.
When making people redundant you have to offer them any other positions that exist that they may be suitable for. Those can be positions with wildly different terms and if the employee chooses to take one that is fine.The redundancy package was 12 months salary (without tax) = £16K. My mother has now opted for this, but it is likely that it will not be accepted.
There is 'suitable position' in the company which she will be offered if redundancy is not accepted. This will be with a loss of pay of around £1K per annum and a reduction in leave from 30 days to 25 days.
From looking at the directgov website, the new role is only 'suitable' if it is similar to the old position. From what I can gather the wording of the new job description is almost identical to that of the current one, however, it mentions that the salary is a large factor in determining this. Would a ~6.5% decrease (£1K) in salary be considered to be reasonable? How about the reduction in leave?
Many thanks.
However the employee does not need to take the offer and, if they don't, the question then arises as to whether they are entitled to redundancy pay.
In order to not pay redundancy the employer needs to prove that the position was suitable and that the refusal was unreasonable. Key amongst the criteria for those is whether the terms of the contract are the same, in this case they are clearly worse so there are grounds for saying that refusing the offer is reasonable.
I would talk to ACAS or an employment solicitor, assuming she isn't in a union, because if she wants to fight it there are grounds to do so, although those grounds aren't as strong as if, for example, the offer was of a job on half the pay 50 miles away.
GeraldSmith said:
In order to not pay redundancy the employer needs to prove that the position was suitable and that the refusal was unreasonable. Key amongst the criteria for those is whether the terms of the contract are the same, in this case they are clearly worse so there are grounds for saying that refusing the offer is reasonable.
How are the terms as stated by the OP significantly worse? They are above statutory requirements regarding holiday entitlement and the pay decrease is equivalent to £19.23 less per week gross.If, as stated, the job description is nearly identical, the employer would need to do little to show the role offered was suitable for redeployment.
fergywales said:
How are the terms as stated by the OP significantly worse? They are above statutory requirements regarding holiday entitlement and the pay decrease is equivalent to £19.23 less per week gross.
If, as stated, the job description is nearly identical, the employer would need to do little to show the role offered was suitable for redeployment.
The problem with an issue like this is that "suitable" isn't well defined where the terms are worse than at present. Offer a new role at the same salary and terms and so long as no other factors apply there is no issue, the employee has to accept. But lower pay and worse conditions are grounds for saying it is not suitable and that is what this is.If, as stated, the job description is nearly identical, the employer would need to do little to show the role offered was suitable for redeployment.
If the job description is nearly identical and the pay and conditions are worse the employer may struggle to show that the position was redundant in the first place, let alone that the new post was suitable or that rejection of it was unreasonable. This is a situation where the OP (or his mother) needs professional advice if she wants to fight it, there is nothing in law to say that she doesn't have a case,but equally there is no guarantee.
So I say to the OP, talk to ACAS or an employment solicitor, this is not a case where people on the internet can help you, more details are required and the person advising you should be someone with good reason to know how a tribunal would react.
GeraldSmith said:
fergywales said:
How are the terms as stated by the OP significantly worse? They are above statutory requirements regarding holiday entitlement and the pay decrease is equivalent to £19.23 less per week gross.
If, as stated, the job description is nearly identical, the employer would need to do little to show the role offered was suitable for redeployment.
The problem with an issue like this is that "suitable" isn't well defined where the terms are worse than at present. Offer a new role at the same salary and terms and so long as no other factors apply there is no issue, the employee has to accept. But lower pay and worse conditions are grounds for saying it is not suitable and that is what this is.If, as stated, the job description is nearly identical, the employer would need to do little to show the role offered was suitable for redeployment.
If the job description is nearly identical and the pay and conditions are worse the employer may struggle to show that the position was redundant in the first place, let alone that the new post was suitable or that rejection of it was unreasonable. This is a situation where the OP (or his mother) needs professional advice if she wants to fight it, there is nothing in law to say that she doesn't have a case,but equally there is no guarantee.
So I say to the OP, talk to ACAS or an employment solicitor, this is not a case where people on the internet can help you, more details are required and the person advising you should be someone with good reason to know how a tribunal would react.
If the OP's mother has decided to accept the package offered, it is unlikely that it will be withdrawn. ACAS (based on Welsh Back just off Queen Square in Bristol OP, if you get nowhere over the phone) will be able to go over the situation more fully than here and advise accordingly. The employer will also prick their ears up at the mention of ACAS, potentially avoiding any games.
Thanks for the replies. I accept that PH is not the best place for advice, but it is a starting point, and the replies so far have been helpful (ACAS for example).
As far as I know, the job description is similar to the current one, but is worded in different terms. It also includes a small amount of extra work.
The company needs two redundancies, and so far 4 people have put their name forward - my mother being one of them. She believes that they are unlikely accept her for redundancy.
At the moment this would leave her in a job which she does not enjoy (this being the case already) for less money and leave. It is the leave which is of main concern to her.
As far as I know, the job description is similar to the current one, but is worded in different terms. It also includes a small amount of extra work.
The company needs two redundancies, and so far 4 people have put their name forward - my mother being one of them. She believes that they are unlikely accept her for redundancy.
At the moment this would leave her in a job which she does not enjoy (this being the case already) for less money and leave. It is the leave which is of main concern to her.
Just to question that statement; what 'roles' have been judged to be redundant? A company can request voluntary redundancy candidates from a pool of workers carrying out similar roles. Roles need to be established to be redundant before divvying up responsibilities.
Something sounds odd in this situation.
Something sounds odd in this situation.
I agree that this doesn't sound right. The company cannot use redundancy simply to reduce people's pay and conditions and that would appear to be what may be happening here. If there are four volunteers for two redundancies then the employer can choose which volunteers to select, but that leaves the remaining employees in the same job as before on the same terms.
An offer of alternative employment only comes in if she is selected for redundancy, then the alternative role offered must be suitable and it must be different from the original role.
So there are two issues here, firstly whether the alternate role being offered is different from the original role. It can be similar work but it cannot be the same work in the same place. If it is doing the same work then the original role was clearly not redundant.
Meanwhile if the work is different then it can be offered as alternate employment but if the terms are not the same then it can be argued that it is not a suitable alternative. This is where we stray from law into opinion, in my opinion a tribunal may rule that it is not suitable if it is at lower pay and conditions. This is difficult, if she was earning £30k and was offered an alternative at £15k then clearly it is not suitable. If she was on £20k and offered £15k would it be suitable? She is on £16k and offered £15k and less holidays, is that suitable? I don't think a tribunal would be too impressed by the company doing this, the difference is fairly small and there is nothing to stop them offering it on the current terms.
So definitely time to talk to someone, ACAS being the obvious choice, of course the most likely outcome is that she will just end up doing the same job on the same terms as now but that has to be a better option than what she faces now.
An offer of alternative employment only comes in if she is selected for redundancy, then the alternative role offered must be suitable and it must be different from the original role.
So there are two issues here, firstly whether the alternate role being offered is different from the original role. It can be similar work but it cannot be the same work in the same place. If it is doing the same work then the original role was clearly not redundant.
Meanwhile if the work is different then it can be offered as alternate employment but if the terms are not the same then it can be argued that it is not a suitable alternative. This is where we stray from law into opinion, in my opinion a tribunal may rule that it is not suitable if it is at lower pay and conditions. This is difficult, if she was earning £30k and was offered an alternative at £15k then clearly it is not suitable. If she was on £20k and offered £15k would it be suitable? She is on £16k and offered £15k and less holidays, is that suitable? I don't think a tribunal would be too impressed by the company doing this, the difference is fairly small and there is nothing to stop them offering it on the current terms.
So definitely time to talk to someone, ACAS being the obvious choice, of course the most likely outcome is that she will just end up doing the same job on the same terms as now but that has to be a better option than what she faces now.
Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff