YVA GUIDE: CONSIDERING REDUNDANCY
Question: what does it mean when the Prime Minister announces that he is holding a breakfast summit on youth employment on the day the jobless figures come out?
Answer: it means bad news. Unemployment rose at its fastest rate for almost 17 years, employment fell even more and the number of young people out of work rose past the one million mark.
It is anticipated that redundancies in 2011 will exceed those seen in 2008. Thus far it has always been a taboo subject to discuss, but YVA Solicitors recognise that it is a hot topic for employers, and we have prepared this guide as a point of reference for those who are considering making staff redundant this year.
Planning
- The employer must draw up a plan to decide who will be kept on and who will be made redundant and why.
- The employer must inform the workforce as soon as possible, so they have a chance to put forward alternatives or apply for other jobs with the current employer or with another employer.
- The employer should consider any proposals that the employees or their representatives make as an alternative to redundancy.
- The employer should decide as soon as possible how many employees will be made redundant.
Consulting
- The employer must consult the employees’ representatives (this includes Unions) if 20 or more people are going to be made redundant. This involves discussion of the business reasons for making the closure. These discussions must take place before a final decision on closure of a workplace is made.
- The employer must discuss alternatives to redundancy and the selection criteria for redundancy.
- The employer can carry on the redundancy procedures whilst the consultation is going on (for example, sending out redundancy notices to the affected employees). However, the employer should not issue redundancy notices before he has had a chance to consult properly.
- If the employer does not consult properly the Employment Tribunal can make the employer pay a “Protective Award”. This states that the employer must keep the employees on and must pay their wages for a certain amount of time (whether they actually remain working or not). The length of this Protective Award period is usually fairly short.
- Whilst there is a duty to consult, an employer is not prevented from making redundancies if after meaningful consultation has taken place, no agreement can be reached.
- The employer must consult the Department for Business Enterprise & Regulatory Reform (BERR) (formerly the DTI) 30 days before dismissal if they are going to make between 20 – 99 employees redundant. Or 90 days if over 100 are to be dismissed. One of the reasons for this is so that accurate employment statistics and records can be compiled.
The selection procedure and criteria cannot be based upon unfair reasons such as Trade Union membership or activity. If the selection criteria is based upon Race, Disability, Age or Sex the affected employee can claim under Unfair Dismissal or the relevant discrimination law.
Selection Procedure
- If a group of employees are selected for redundancy the employer must show what type of work they do and why the demand for that work has decreased or stopped completely.
- If the amount of work has decreased so that only some of the employees within a group are selected, the employer must show how they picked those unlucky ones.
- The employer must show in detail the selection procedure and criteria. This can range from “last in first out” to a scoring system, with the employer giving points for certain job skills.
- The selection criteria should not be based upon an individual’s view of each employee, (for example, what the personnel manager thinks).
- Once the criteria has been agreed it should be kept to.
The employer should also try and agree the selection criteria with the employees’ representatives or Union.
The selection procedure and criteria cannot be based upon unfair reasons such as Trade Union membership or activity. If the selection criteria is based upon Race, Disability, Age or Sex the affected employee can claim under Unfair Dismissal or the relevant discrimination law.
Consulting each employee
The employer must consult each affected employee before dismissal notices are handed out, so that there is a chance of real consultation and time for the employee to respond. The selected group may change due to the consultation process.
The consultation must involve the following: Why their type of job is under threat. Explain why according to the selection criteria this employee may be chosen for redundancy. (They have not been selected yet as the dismissal notices have yet to be sent out). The employee should be given a couple of days to respond after being told. The employer should consider any views or opinions expressed by the employee.
Both the employer and employee should consider any alternative work that the employee could do or any ways in which the employee could stay in their current job.
Once the selection has been finally decided the employer should have a second interview with each of the effected employees. This is when the employer can actually hand out the dismissal notices.
Other work
The employer can offer the employee other work instead of making them redundant. The employee has a choice whether to accept it or not. Though if the employee unreasonably refuses the offer the employer may avoid paying them redundancy pay. The employer can offer the employee a job identical to their current job or a job with similar skills. The job must have similar pay, conditions and skill requirements. Any refusal is looked at from each individual employee’s view. Some employees may accept the offer, others for their own personal reasons may not. For example, the new job may require more travelling for some employees than their current job, but less for others.
The alternative job offer must be made before the current job ends and the start date must be no more than 4 weeks after the old job ended. The first 4 weeks of the new job will be a trial period. During this time or when the 4 weeks have finished the employee can still leave the job and claim dismissal and redundancy pay. The employer and employee can agree a longer trial period for the new job if they want, 4 weeks is the minimum period.
An employer may claim that a dismissal is because of reorganisation, in order to avoid making a redundancy payment. An employer can legitimately dismiss an employee if he or she will not accept a change in terms and conditions resulting from a reorganisation if the employer can show such changes are necessary to the continued management and efficiency of the business, and the employee’s refusal to “fit in” justifies the dismissal.
It is sufficient for an employer to show the reorganisation is for sound business reasons, which require a change in an employee’s terms and conditions.
What can YVA do for you?
YVA Solicitors has a long history of representing employers in relation to all aspects of employment law including matters of unfair dismissal, redundancy, sex discrimination and harassment, race and disability discrimination and comprise agreements and we can advise on a range of issues in respect of employment contracts.
What next?
Should you wish to discuss matters generally or require case specific advice please do not hesitate to contact the Employment Department at YVA Solicitors.
Please click here: Redundancy
Possession Proceedings – Unprecedented Changes (PD 55C)
The purpose of the changes is to take into account the effect of the pandemic on all parties maintaining confidence in fairness of outcomes, encouraging compromise and to ensure the defendants are provided with legal advice.
Current Restrictions
- Moratorium on forfeiture of business tenancies extended until 31 December 2020 and is further extended until 31 March 2021.
- In Commercial Rent Arrears Recovery proceedings (“CRAR”) the minimum unpaid rent must be equivalent to 276 days rent until 24 December 2020 and 366 days from 25 December 2020. The restriction on landlords using CRAR to recover unpaid rent will also automatically extend to the end of March, in line with the moratorium’s expiry date. This allows businesses sufficient breathing space to pay rent owed.
- PD 55C: Possession Proceedings
- Reactivation Notice required for stayed claims
- New notice requirements for new claims
Overall Arrangements
- Emphasis on compromise
- Legal advice and assistance for defendants
- Non-statutory best practice guidance:
– MHCLG guidance for private and social landlords and tenants
– NRLA Pre-Action Plan: Managing Arrears and avoiding possession claims
– FCA guidance ‘Mortgages and Coronavirus’ (to 31.7.2021)
– MHCLG Code of Practice for commercial property relationships during the Covid-19 pandemic (to 24.6.2021)
New Listing Priorities
- Court will no longer fix hearing dates when claim is issued
- No more block listing
- 21 days’ notice
- Cases will be given priority if they involve the following:
- Anti-Social behaviour allegations;
- Extreme rent arrears;
- Squatters or illegal occupiers and persons unknown;
- Fraud or Deception;
- Unlawful Subletting;
- Allegations of abandonment of the Property;
- Local authority temporary accommodation needed for reallocation
Covid-19 Case Marking
- Intended to highlight settlement suitability and assist the court in dealing with listing, case management and the exercise of discretion
- Any Defendant or private Claimant may request a case is marked
- Specified information required
- Upon making request must inform all other parties. Request will result in case marking unless objection raised
- Judge may also direct that a case is Covid-19 marked
Review and Substantive Hearing Dates
The Review (R) Date:
– a 5-minute non-attended appointment on the documents
– requirements of the claimant relating to bundles before R date
– requirement that claimant is available to discuss the case during the R date
– consequence of failure to resolve case on the R date
The Substantive (S) Hearing Date:
– a 15-minute hearing attended by all parties 28 days after the R Date
– a physical hearing unless the parties agree otherwise or contingency arrangements apply
– unless case resolved, a decision by the Court or further case management directions
– adjournment considered without application where advice not yet made available to Defendants and consequences of order ‘may be serious’
Accelerated Possession Claims
- As with existing rules, the court can still make a possession order without a hearing
- Reactivation notice requirements apply for stayed claims
- The same priorities apply as with normal cases in the order in which they will be dealt with
- Will be referred to judges “at a manageable frequency”
- Where the parties agree or there is no objection a review hearing can be ordered
Evictions
- 14 days’ notice of an eviction date required
- Indicated that applications for transfer to High Court will not be prioritised
- No execution of possession warrants or delivering notices of eviction between 17/11/2020 and 11/01/2021.
- The Public Health (Coronavirus)(Protection from Eviction and Taking Control of Goods)(England) Regulations 2020
- There will be no enforcement of possession orders “Where lockdown measures are in place to protect public health”
- No evictions over Christmas Period save for the most serious of cases
How will the arrangements work in Practice?
The key aims of the overall arrangements are to reduce volume in the system by enabling earlier advice and facilitating settlement. How well this works in Practice is yet to be seen. What we do know is that delays will be inevitable and Covid-19 Case Marking is likely to become the norm. In the circumstances, it appears the Accelerated possession claims may be the ‘Cinderella’ of the situation.
Possession Proceedings – Unprecedented Changes (PD 55C)
The purpose of the changes is to take into account the effect of the pandemic on all parties maintaining confidence in fairness of outcomes, encouraging compromise and to ensure the defendants are provided with legal advice.
Current Restrictions
- Moratorium on forfeiture of business tenancies extended until 31 December 2020 and is further extended until 31 March 2021.
- In Commercial Rent Arrears Recovery proceedings (“CRAR”) the minimum unpaid rent must be equivalent to 276 days rent until 24 December 2020 and 366 days from 25 December 2020. The restriction on landlords using CRAR to recover unpaid rent will also automatically extend to the end of March, in line with the moratorium’s expiry date. This allows businesses sufficient breathing space to pay rent owed.
- PD 55C: Possession Proceedings
- Reactivation Notice required for stayed claims
- New notice requirements for new claims
Overall Arrangements
- Emphasis on compromise
- Legal advice and assistance for defendants
- Non-statutory best practice guidance:
– MHCLG guidance for private and social landlords and tenants
– NRLA Pre-Action Plan: Managing Arrears and avoiding possession claims
– FCA guidance ‘Mortgages and Coronavirus’ (to 31.7.2021)
– MHCLG Code of Practice for commercial property relationships during the Covid-19 pandemic (to 24.6.2021)
New Listing Priorities
- Court will no longer fix hearing dates when claim is issued
- No more block listing
- 21 days’ notice
- Cases will be given priority if they involve the following:
- Anti-Social behaviour allegations;
- Extreme rent arrears;
- Squatters or illegal occupiers and persons unknown;
- Fraud or Deception;
- Unlawful Subletting;
- Allegations of abandonment of the Property;
- Local authority temporary accommodation needed for reallocation
Covid-19 Case Marking
- Intended to highlight settlement suitability and assist the court in dealing with listing, case management and the exercise of discretion
- Any Defendant or private Claimant may request a case is marked
- Specified information required
- Upon making request must inform all other parties. Request will result in case marking unless objection raised
- Judge may also direct that a case is Covid-19 marked
Review and Substantive Hearing Dates
The Review (R) Date:
– a 5-minute non-attended appointment on the documents
– requirements of the claimant relating to bundles before R date
– requirement that claimant is available to discuss the case during the R date
– consequence of failure to resolve case on the R date
The Substantive (S) Hearing Date:
– a 15-minute hearing attended by all parties 28 days after the R Date
– a physical hearing unless the parties agree otherwise or contingency arrangements apply
– unless case resolved, a decision by the Court or further case management directions
– adjournment considered without application where advice not yet made available to Defendants and consequences of order ‘may be serious’
Accelerated Possession Claims
- As with existing rules, the court can still make a possession order without a hearing
- Reactivation notice requirements apply for stayed claims
- The same priorities apply as with normal cases in the order in which they will be dealt with
- Will be referred to judges “at a manageable frequency”
- Where the parties agree or there is no objection a review hearing can be ordered
Evictions
- 14 days’ notice of an eviction date required
- Indicated that applications for transfer to High Court will not be prioritised
- No execution of possession warrants or delivering notices of eviction between 17/11/2020 and 11/01/2021.
- The Public Health (Coronavirus)(Protection from Eviction and Taking Control of Goods)(England) Regulations 2020
- There will be no enforcement of possession orders “Where lockdown measures are in place to protect public health”
- No evictions over Christmas Period save for the most serious of cases
How will the arrangements work in Practice?
The key aims of the overall arrangements are to reduce volume in the system by enabling earlier advice and facilitating settlement. How well this works in Practice is yet to be seen. What we do know is that delays will be inevitable and Covid-19 Case Marking is likely to become the norm. In the circumstances, it appears the Accelerated possession claims may be the ‘Cinderella’ of the situation.
