Making a key worker redundant
Discussion
Hopefully, a quick and easy one.
My wife has been told today that she is being made redundant. The business is a small one:
-- Two directors.
-- One shop manager, managing the shop and the website.
-- One accounts manager, my wife.
She handles:
-- Book-keeping
-- Payroll
-- Month-end
-- HMRC
-- VAT returns
-- Petty cash
-- Credit control
-- Cash flow
-- etc.
The directors and shop manager do not get involved in any accounting work, nor have the skills to do so. She is being made redundant because they can no longer afford to pay her.
My question is this:
If the work still needs doing and none of the existing staff can do that work, then surely she is being made redundant and not the role. All of that work will still need to be done. We feel that it is inevitable that they will have to pay their accountants to do some if not all of the work.
We are OK with the redundancy; the writing is clearly on the wall. However, we want to make sure that we get the fairest possible redundancy package. So far it has been handled very badly; they do not, for example, have an inkling on what the rules surrounding redundancy are.
Just so that we understand the situation more clearly, is this a justified redundancy?
Thanks in advance.
My wife has been told today that she is being made redundant. The business is a small one:
-- Two directors.
-- One shop manager, managing the shop and the website.
-- One accounts manager, my wife.
She handles:
-- Book-keeping
-- Payroll
-- Month-end
-- HMRC
-- VAT returns
-- Petty cash
-- Credit control
-- Cash flow
-- etc.
The directors and shop manager do not get involved in any accounting work, nor have the skills to do so. She is being made redundant because they can no longer afford to pay her.
My question is this:
If the work still needs doing and none of the existing staff can do that work, then surely she is being made redundant and not the role. All of that work will still need to be done. We feel that it is inevitable that they will have to pay their accountants to do some if not all of the work.
We are OK with the redundancy; the writing is clearly on the wall. However, we want to make sure that we get the fairest possible redundancy package. So far it has been handled very badly; they do not, for example, have an inkling on what the rules surrounding redundancy are.
Just so that we understand the situation more clearly, is this a justified redundancy?
Thanks in advance.
Edited by selwonk on Wednesday 24th May 09:28
selwonk said:
My question is this:
If the work still needs doing and none of the existing staff can do that work, then surely she is being made redundant and not the role. All of that work will still need to be done. We feel that it is inevitable that they will have to pay their accountants to do some if not all of the work.
We are OK with the redundancy; the writing is clearly on the wall. However, we want to make sure that we get the fairest possible redundancy package. So far it has been handled very badly; they do not, for example, have an inkling on what the rules surrounding redundancy are.
Just so that we understand the situation more clearly, is this a justified redundancy?
Thanks in advance.
They are quite entitled to assign tasks to other staff members (or outsource them) & make a specific position redundant If the work still needs doing and none of the existing staff can do that work, then surely she is being made redundant and not the role. All of that work will still need to be done. We feel that it is inevitable that they will have to pay their accountants to do some if not all of the work.
We are OK with the redundancy; the writing is clearly on the wall. However, we want to make sure that we get the fairest possible redundancy package. So far it has been handled very badly; they do not, for example, have an inkling on what the rules surrounding redundancy are.
Just so that we understand the situation more clearly, is this a justified redundancy?
Thanks in advance.
Take the money and run.
Thanks for the input folks.
We've done some reading up tonight and appreciate that an inability to pay wages is a genuine reason to make someone redundant. Naturally, she wants to take the redundancy ASAP; we just want to make sure everything is being done properly.
They may, however, have been a bit sharp. About 10 weeks ago they insisted that she reduce her days from 4 to 3. About 5 weeks ago my daughter broke her femur and is, essentially, housebound. They insisted at that point that she spend more time at home and reduced her days to 2. None of this was formally agreed; they simply insisted.
It looks as though the redundancy calculation can be made on the reduced hours over the last 12 weeks in which case they look to have pulled a fast one. We'll see what is offered.
One other question; does the size of the company and the headcount make any difference to the redundancy process? They told her she was being made redundant today.
-- It has not been discussed previously despite them telling her that they made the decision in February.
-- They have not put anything in writing.
-- They have not calculated her redundancy pay.
-- They have not even checked what her notice period is.
I thought there was a formal process that should be followed?
Cheers.
We've done some reading up tonight and appreciate that an inability to pay wages is a genuine reason to make someone redundant. Naturally, she wants to take the redundancy ASAP; we just want to make sure everything is being done properly.
They may, however, have been a bit sharp. About 10 weeks ago they insisted that she reduce her days from 4 to 3. About 5 weeks ago my daughter broke her femur and is, essentially, housebound. They insisted at that point that she spend more time at home and reduced her days to 2. None of this was formally agreed; they simply insisted.
It looks as though the redundancy calculation can be made on the reduced hours over the last 12 weeks in which case they look to have pulled a fast one. We'll see what is offered.
One other question; does the size of the company and the headcount make any difference to the redundancy process? They told her she was being made redundant today.
-- It has not been discussed previously despite them telling her that they made the decision in February.
-- They have not put anything in writing.
-- They have not calculated her redundancy pay.
-- They have not even checked what her notice period is.
I thought there was a formal process that should be followed?
Cheers.
Redundancy procedure is explained on the gov.uk website.
A failure to follow procedure might render an otherwise fair redundancy unfair, but the compensation for this would be small, if a fair process would have led to the same outcome.
Please tell more of the possible artifice to reduce the pay-out. You may be able to do something about that. If you wish, PM me and you can then tell me full details in confidence. IAAAL but IANYL.
A failure to follow procedure might render an otherwise fair redundancy unfair, but the compensation for this would be small, if a fair process would have led to the same outcome.
Please tell more of the possible artifice to reduce the pay-out. You may be able to do something about that. If you wish, PM me and you can then tell me full details in confidence. IAAAL but IANYL.
selwonk said:
Hsurely she is being made redundant and not the role.
This is a false distinction. Redundancy is much misunderstood, and is the subject of much bloke in pub un-wisdom.Only a person can be made redundant. Redundancy is a reason for dismissal. Redundancy can arise in various ways. A business decision by an employer no longer to have an employee to do work that still needs to be done, but to get that work done through an external agent, or through re allocating the work internally, can give rise to a redundancy situation.
Contrary to pub myth, Employment Tribunals will not scrutinise business decisions, even if they are bad ones.
Gotcha. Makes things clearer; thank you.
In respect of the potentially reduced payout, in a nutshell, my wife has been working 4 days a week for 6 years. The company decided to make her redundant in February but did not discuss this with her. Over the last 10 weeks, they have insisted on her reducing her hours to 3 and then 2 days. This was a unilateral decision. Yesterday they told her she was being made redundant[1].
They have not told her what her redundancy payment will[2] be but we suspect that they will calculate it on 2 rather than 4 days, or on an average of the days worked over the last 12 weeks. If they had discussed the redundancy with her in February, then we would have been able to consider the ramifications of accepting the reduced hours[3].
Also, this company is not hugely profitable but is also far from insolvent. We are not really interested in any potential compensation that might arise from a tribunal case; it is really the principle of the matter. We feel that they have taken advantage of my wife's good nature and that they need to understand that that's not on.
Some queries from above:
[1] Should there not have been a previous meeting to discuss the redundancy followed by a consultation period?
[2] Should this not have been prepared in writing to be presented during the meeting to tell her she is now redundant?
[3] If points 1. and 2. had been followed, we would have been forewarned. Is this not somewhat underhand?
None of this will affect the outcome of the redundancy; that is now a foregone conclusion. We just want to look after her interests and ensure the process has been carried out fairly. We may be pleasantly surprised and find that the proposed payment is completely fair, but if it isn't it's not something that we would take lying down.
One final question. Is it correct that my wife should accept the redundancy payment regardless of how it has been calculated and that she can then seek legal advice after the event if we feel that the calculation was unfair? This would, naturally, serve us well in respect of wanting to take the money and run, but we don't want to close the door completely, so to speak.
Thanks again!
In respect of the potentially reduced payout, in a nutshell, my wife has been working 4 days a week for 6 years. The company decided to make her redundant in February but did not discuss this with her. Over the last 10 weeks, they have insisted on her reducing her hours to 3 and then 2 days. This was a unilateral decision. Yesterday they told her she was being made redundant[1].
They have not told her what her redundancy payment will[2] be but we suspect that they will calculate it on 2 rather than 4 days, or on an average of the days worked over the last 12 weeks. If they had discussed the redundancy with her in February, then we would have been able to consider the ramifications of accepting the reduced hours[3].
Also, this company is not hugely profitable but is also far from insolvent. We are not really interested in any potential compensation that might arise from a tribunal case; it is really the principle of the matter. We feel that they have taken advantage of my wife's good nature and that they need to understand that that's not on.
Some queries from above:
[1] Should there not have been a previous meeting to discuss the redundancy followed by a consultation period?
[2] Should this not have been prepared in writing to be presented during the meeting to tell her she is now redundant?
[3] If points 1. and 2. had been followed, we would have been forewarned. Is this not somewhat underhand?
None of this will affect the outcome of the redundancy; that is now a foregone conclusion. We just want to look after her interests and ensure the process has been carried out fairly. We may be pleasantly surprised and find that the proposed payment is completely fair, but if it isn't it's not something that we would take lying down.
One final question. Is it correct that my wife should accept the redundancy payment regardless of how it has been calculated and that she can then seek legal advice after the event if we feel that the calculation was unfair? This would, naturally, serve us well in respect of wanting to take the money and run, but we don't want to close the door completely, so to speak.
Thanks again!
I did wonder whether the single redundancy precluded the need for the complete process. I sort of agree about the letter, but bear in mind that yesterday she basically left the company after taking pay in lieu of notice. She will have to return her laptop on Monday, but has essentially been made redundant with nothing in writing. They didn't even know how many weeks notice to pay her for; she had to tell them!
selwonk said:
I did wonder whether the single redundancy precluded the need for the complete process. I sort of agree about the letter, but bear in mind that yesterday she basically left the company after taking pay in lieu of notice. She will have to return her laptop on Monday, but has essentially been made redundant with nothing in writing. They didn't even know how many weeks notice to pay her for; she had to tell them!
If I were you then I think that I would take up Breadvan's kind offer as I don't see anyone else on here who is actually knowledgeable enough or qualified to help and advise you.Crafty_ said:
Consultation of redundancy is required when there are a certain number of positions/people at risk, doesn't apply to just a single person I think.
One would presume they will provide official written notice. To be honest to have a letter first would be somewhat cold.
You are wrong about consultation. There are some distinct rules as to collective consultation when making several employees redundant at once, but even in the case of a single employee fairness requires some consultation. One would presume they will provide official written notice. To be honest to have a letter first would be somewhat cold.
There is no such thing as "official written notice", and even if there was such a thing, what form would that take other than, say, a letter? This is a private employer, not a Government. The employer can give notice in writing and sometimes otherwise (the employment agreement may stipulate the form of notice).
Selwonk, do you want to spend a chunky sum making an employment tribunal claim (you have to pay a three figure sum to start a claim), and then incur the (usually irrecoverable) cost and (always irrecoverable and always worse than you expect) hassle of pursuing such a claim? If the redundancy is procedurally unfair, but could have been done fairly, the compensation payment would be very small.
Litigate about principle if you wish. That is always a good way to become poorer, and you get bonus damage to your mental health.
Bang off some firm but polite letters, maybe, and see if the company will do a deal, but maybe hesitate before taking a beef further, unless the beef has a distinctly favourable reward to risk/hassle ratio.
Litigate about principle if you wish. That is always a good way to become poorer, and you get bonus damage to your mental health.
Bang off some firm but polite letters, maybe, and see if the company will do a deal, but maybe hesitate before taking a beef further, unless the beef has a distinctly favourable reward to risk/hassle ratio.
Thanks again for the excellent input. We really don't want to have to do anything so hopefully this week will see a fair offer made and we can move on.
We've done what we think is a fair calculation and compared it with the worst case scenario and it would not be worth taking any action.
You are, of course, quite correct about the costs and hassle. We were hoping that if things had very clearly been done badly that it would give us a good bargaining position. As you say, we need to put our feelings in writing and go from there.
Thanks again and I'll provide an update during the week.
Cheers.
We've done what we think is a fair calculation and compared it with the worst case scenario and it would not be worth taking any action.
You are, of course, quite correct about the costs and hassle. We were hoping that if things had very clearly been done badly that it would give us a good bargaining position. As you say, we need to put our feelings in writing and go from there.
Thanks again and I'll provide an update during the week.
Cheers.
You also need to take into account that statutory redundancy is the square root of f$%k all.
The current cap is £489 / week.
You get one week per year under the age of 41, 1.5 weeks per year over 41.
So, if you're 50 and you've been there 10 years, the maximum you'll get is £7335.
It doesn't sound to me like they'll be paying any kind of enhanced redundancy package.
The current cap is £489 / week.
You get one week per year under the age of 41, 1.5 weeks per year over 41.
So, if you're 50 and you've been there 10 years, the maximum you'll get is £7335.
It doesn't sound to me like they'll be paying any kind of enhanced redundancy package.
selwonk said:
If the work still needs doing and none of the existing staff can do that work, then surely she is being made redundant and not the role. All of that work will still need to be done. We feel that it is inevitable that they will have to pay their accountants to do some if not all of the work.
People are made redundant all the time when jobs are outsourced to external contractors or other countries.....so it must be possible for companies to justify redundancy on that basis.Just a quick update...
Somewhere between being made redundant on Friday and this morning, they have realised that they should have followed the correct procedure. So it's now:
1. First meeting last Friday to discuss redundancy.
2. Second meeting today to confirm redundancy.
3. Third meeting on Friday to confirm redundancy package.
It's all a bit of a cock up but so far so good. I'll keep you posted.
Thanks again.
Somewhere between being made redundant on Friday and this morning, they have realised that they should have followed the correct procedure. So it's now:
1. First meeting last Friday to discuss redundancy.
2. Second meeting today to confirm redundancy.
3. Third meeting on Friday to confirm redundancy package.
It's all a bit of a cock up but so far so good. I'll keep you posted.
Thanks again.
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