Redundancy - is this legal?

[DaveR]

Suppose you work for a large organisation, and you are part of a team within it comprised of 20 people.

One day, the team leader announces that the whole team is "provisionally at risk". There are only roles for 6 people in the future. He then states that your options are either to accept a redundancy package and leave (and tells you what your figure would be) or you can apply for one of the 6 roles ***BUT*** if you apply for one of those roles and you're unsuccessful then you forfeit your redundancy package.

You have 5 working days to indicate whether or not you want to accept redundancy or apply for one of the roles.

Obviously 14 people are going to be out of the door but, under the rules as laid out, if they all apply for one of the roles the employer gets rid of them and pays fk all.

Can anyone legally qualified to comment provide a view (quickly) on that please?

Thanks,

Dave.

[SplatSpeed]

if you get the role you don't get redundancy!

[530dTPhil]

If you apply and are unsuccessful, you are still being made redundant and should therefore qualify for a payment.
If you take the scenario where each of the twenty people applies and only six are appointed, does the company really expect to sidestep paying redundancy to the fourteen unsuccessful applicants?

[Deva Link]

DaveR said:

He then states that your options are either to accept a redundancy package and leave (and tells you what your figure would be) or you can apply for one of the 6 roles ***BUT*** if you apply for one of those roles and you're unsuccessful then you forfeit your redundancy package.

Well, this is exactly what's happening to my wife at the moment, and she is a Civil Servant.

It's called an enhanced severance scheme at the moment, but anybody who doesn't get it (even if they apply and are rejected) and is then subsequently made redundant will only get the basic redundancy package.

[SplatSpeed]

the first people happily taking rudundency allways receive more!

[Soovy]

Deva Link said:

Well, this is exactly what's happening to my wife at the moment, and she is a Civil Servant.

It's called an enhanced severance scheme at the moment, but anybody who doesn't get it (even if they apply and are rejected) and is then subsequently made redundant will only get the basic redundancy package.

This.

If you accept and go early then you get a swet package. If you gamble and apply for one of the jobs and don't get one then you get the basic redundancy.

So, take the money or open the box?

[Mattlan]

Not of the above are correct except 530, OP states that should you apply for one of the 6 ongoing positions and are not selected, then there would be no redundancy package at all as far as I can tell. This, to the best of my limited knowledge, is not legal, and smacks of the company wanting to attract as many employees as possible into the mildly enhanced pre package to reduce the effort / issues in scoring the remaining 6 positions

[DaveR]

Thanks for the quick replies chaps.

Deva/Soovy - this only started about 2 hours ago. I think you guys have it on the head. Apparently (I now know) there is a watered-down pay-off if you don't opt to take the 'enhanced' offer and don't get one of the 6 roles either.

Matt - sorry for the misunderstanding there, and thanks.

[Silver993tt]

I've never understood why redundancy payments are given in the first place. You get paid for the time one provides to the employer, the employer gives notice that one's services aren't required (notice period defined in contract) and you leave. Why should the employer give any additional payments above the normallly agrred salery/pay defined in the contract? The money has to come from somewhere, either goes on to the cost of the services/products the company provides (so disadvantages existing employees) and/or limits taking on people in the future (due to less funds).

Edited by Silver993tt on Thursday 3rd February 17:56

[Deva Link]

Mattlan said:

Not of the above are correct except 530, OP states that should you apply for one of the 6 ongoing positions and are not selected, then there would be no redundancy package at all as far as I can tell. This, to the best of my limited knowledge, is not legal, and smacks of the company wanting to attract as many employees as possible into the mildly enhanced pre package to reduce the effort / issues in scoring the remaining 6 positions

They would obviously have to pay the statutory redundancy payments, but they're pretty minimal, especially for employees with limited service.

Managers within companies can be very dumb though, and may not have understood what they were saying. In my wife's case, one of the very senior managers encouraged people to apply, saying the money could be the deposit on a house. He was unable to explain how people without jobs would be able to secure a mortgage though. (And this is in a Govermnent Dpaertment that deals with financial matters).

[jakejake]

Silver993tt said:

I've never understood why redundancy payments are given in the first place. You get paid for the time to provide for the employer, the employer gives notice that one's services aren't required (notice period defined in contract) and you leave. Why should the employer give any additional payments above the normallly agrred salery/pay defined in the contract? The money has to come from somewhere, either goes on to the cost of the services/products the company provides (so disadvantages existing employees) and/or limits taking on people in the future (due to less funds).

I think it's fair enough if the deal is recipricol. Therefore if an employee wants to leave they need to pay the employer a "redundant employer" fee based on how long they have worked there. It's always bemused me that my staff can leave with one months notice but I can't ask them to leave with one months notice unless I jump through lots of hoops and probably get sued.

[SplatSpeed]

jakejake said:

I think it's fair enough if the deal is recipricol. Therefore if an employee wants to leave they need to pay the employer a "redundant employer" fee based on how long they have worked there. It's always bemused me that my staff can leave with one months notice but I can't ask them to leave with one months notice unless I jump through lots of hoops and probably get sued.

employ contractors if that is what you want!

[Deva Link]

Silver993tt said:

I've never understood why redundancy payments are given in the first place. You get paid for the time one provides to the employer, the employer gives notice that one's services aren't required (notice period defined in contract) and you leave. Why should the employer give any additional payments above the normallly agrred salery/pay defined in the contract? The money has to come from somewhere, either goes on to the cost of the services/products the company provides (so disadvantages existing employees) and/or limits taking on people in the future (due to less funds).

Why have employees at all? Why doesn't everyone just stand on street corners in the morning and hope that they get picked for a days work.

[Silver993tt]

SplatSpeed said:

employ contractors if that is what you want!

My opinion is that everyone should be on a 'contract' and no redundancy at all. You get paid for your time and that's it. No sick pay (take out your own insurance) no holiday pay (no input into the empoylers business). This is how 'contractors' work so why not everyone else?

[matt28]

Silver993tt said:

I've never understood why redundancy payments are given in the first place. You get paid for the time one provides to the employer, the employer gives notice that one's services aren't required (notice period defined in contract) and you leave. Why should the employer give any additional payments above the normallly agrred salery/pay defined in the contract? The money has to come from somewhere, either goes on to the cost of the services/products the company provides (so disadvantages existing employees) and/or limits taking on people in the future (due to less funds).

Because quite often you want to give an incentive to a decent and successful handover. When someone's role is being made redundant, it's often because the responsibilities are being shared out elsewhere so you need/want that person to be as cooperative as possible. Generally it's written in that a redundancy payment is made on condition of "successful handover of duties".

Additionally it gives an incentive to members of staff who are staying after a (generally demoralising) redundancy process. If a precedence is set that a redundancy results in an ok-ish payment, increasing with service, then those who have just gone through the process, who you probably want to keep, won't think "well, there's no point in sticking around here cos there may be another set of redundancies and I'll be out of a job with minimal payout... instead I'll look around now".

[SplatSpeed]

Silver993tt said:

My opinion is that everyone should be on a 'contract' and no redundancy at all. You get paid for your time and that's it. No sick pay (take out your own insurance) no holiday pay (no imput into the empoyees business). This is how 'contractors' work so why not everyone else?

Because contractors are a lot more expensive!

[Silver993tt]

Deva Link said:

Why have employees at all? Why doesn't everyone just stand on street corners in the morning and hope that they get picked for a days work.

I worked at a contractor for around 10 years. I never had to stand on a street corner. My work came directly from clienst or via employment agencies. Why would a contractor gave to stand on a street corner, please explain?

[Silver993tt]

SplatSpeed said:

Because contractors are a lot more expensive!

NO they are not, they are significantly cheaper than an employee, especially for the first 3 years. No training costs, no holiday costs, no sick costs, no insurance costs, no redundancy costs, no NI costs. They cam also be employed for the short term such as 3-6 months.

[matt28]

Silver993tt said:

My opinion is that everyone should be on a 'contract' and no redundancy at all. You get paid for your time and that's it. No sick pay (take out your own insurance) no holiday pay (no input into the empoylers business). This is how 'contractors' work so why not everyone else?

Because some people (AND companies) want more security than a contract model.

[SplatSpeed]

Silver993tt said:

NO they are not, they are significantly cheaper than an employee, especially for the first 3 years. No training costs, no holiday costs, no sick costs, no insurance costs, no redundancy costs, no NI costs. They cam also be employed for the short term such as 3-6 months.

you are not charging enough then!