• Robert Spicer

Redundancy law and practice - Part 9

Updated: Jan 10, 2021

TIME OFF TO LOOK FOR WORK

Employees with at least two years continuous employment are entitled to reasonable time off during a redundancy dismissal notice period.

Reasonableness involves a balance between the needs of employers and employees. Time off must be allowed during working hours.

References:

Dutton v Hawker Siddeley Aviation Ltd [1978] IRLR 390, EAT

Ratcliffe v Dorset CC [1978] IRLR 191, EAT

COLLECTIVE CONSULTATION

Trade Union and Labour Relations (Consolidation) Act 1992,ss. 188-198

Employers must inform and consult with representatives of workers who may be affected by proposed redundancy dismissals or by measures taken in connection with those dismissals.

This arises where 20 or more workers are proposed to be dismissed at one “establishment” within a period of 90 days.

There is no precise definition of “establishment”. In general terms, it is the unit to which employees were assigned to carry out their duties.

Seahorse Maritime Ltd v Nautilus International (2019) Morning Star, February 15, Court of Appeal

S Ltd, a company based in the UK, supplied crew members to ships operated by other companies, including Sealion Shipping Ltd, which were mainly based outside the UK. S Ltd’s employees were required to work on any of Sealion’s ships. Most worked on one ship from four to six weeks and some moved between ships. In 2015 Sealion took some ships out of service, putting crew members at risk of redundancy. Nautilus, the trade union, claimed protective awards on the basis that S Ltd had failed to consult with it although it was proposing to dismiss 20 or more employees. The union had to show that the fleet of ships counted as an establishment. The ET accepted that the whole fleet was an establishment. This decision was upheld by the EAT and S Ltd appealed to the Court of Appeal.

The appeal was allowed. As crew members were assigned to particular ship, each ship was an establishment and there was no obligation to consult. There was not a sufficient connection between the ships and the UK for the case to come within UK law.

Failure to inform or consult can result in a claim for a protective award.

Government department employees, the police and armed forces are excluded.

Fixed-term employees: excluded unless it is proposed to cut short their contracts.

Redundancy has a different definition for these purposes: it includes dismissals for reasons not related to the workers concerned, for example reorganisation. Consultation applies in the following circumstances:

  • Where the employer proposes variation of contracts

  • Where the employer proposes to redeploy workers on substantially different contracts.

The general principle is that consultation must take place with trade union representatives or with elected worker representatives.

“Affected employees” includes workers who will not be made redundant but whose working conditions will be changed.

The following points are relevant to collective consultation;

  • Where it is proposed to make 100 or more workers, consultation must start at least 45 days before the first dismissal. Where the redundancy proposal is for at least 20 but not more than 100, consultation must start at least 30 days before.

  • Consultation must begin when an employer is contemplating collective redundancies.

  • Consultation means negotiation. It must take place when redundancy proposals are at a formative stage.

  • Employers must disclose in writing the following:

  • * Reason for the proposals

  • * Number of employees proposed to be made redundant

  • * Proposed methods of selection

  • * Calculation of redundancy payments.

  • Where there is no trade union or elected representatives, each affected worker must be provided with this information.

QUESTIONNAIRES

The use of a questionnaire to obtain information from an employer is no longer governed by statute, and the ET has no power to draw an adverse inference from an employer’s failure to answer.

Questionnaires are now covered by detailed ACAS guidance. There is no set form. The Legal Action Group recommends that questions should be set out in the following categories:

  • Information on the facts of the matter

  • The treatment of other workers

  • Statistical and procedural issues.

SUMMARY OF REDUNDANCY ISSUES

  • Time off work to look for new employment

  • Eligibility for redundancy pay

  • Eligibility for unfair dismissal claim

  • Chances of success of claim

  • Potential amount of compensation

  • Eligibility for discrimination claim.

MISCELLANEOUS CASES

Written notice

Haywood v Newcastle upon Tyne Hospitals NHS Foundation Trust [2018] UKSC 22, Supreme Court

The Trust identified H’s post as redundant. If her employment terminated by reason of redundancy on or after her 50th birthday on July 20, 2011, she could claim a non-actuarially reduced pension. H told the employer that she was taking two weeks annual leave from April 18. The Trust issued 12 weeks written notice of redundancy on April 20. It was delivered to her home on April 21 by recorded delivery. A relative collected the letter from the sorting office on April 26. On April 27 H read the letter. She claimed that the notice period ran from April 27 and expired on July 20. The Trust argued that there was a common law rule that notice was given when the letter was delivered to an address.

The Supreme Court found that when an employee was dismissed on written notice posted to her home address, and there was no express provision in the contract of employment as to when the notice period would run, the court would imply a term that written notice only took effect when it came to the employee’s attention and she had either read the notice or had a reasonable opportunity of so doing. The presumption of receipt at the address was rebuttable.

Causation

Sanders v Ernest Neale [1974] IRLR 236, NIRC: There is no redundancy where an employee is dismissed for taking part in industrial action, even where circumstances suggest redundancy.

Change in terms of employment

Johnson v Nottinghamshire Combined Police Authority [1974] 1 WLR 358, CA: there is no redundancy where there is a proposed change in hours of work but no change to the nature of work or total number of hours.

Curling v Securicor Ltd [1992] IRLR 549, EAT: employers must make their position clear where they intend to rely on the contractual mobility clause in cases of potential redundancy.

Stevenson v Teesside Bridge and Engineering [1971] 1 All ER 296, DC: an employee may be refused redundancy payment where he declines an offer to work away from home (steel erector).

Chapman v Goonvean and Rostowrack China Co [1973] 1 WLR 678, CA: an employer who had for many years provided free transport to work withdrew the service on economic grounds. The employer offered to continue to employ workers affected on the basis that they would make own arrangements for transport. Workers refused and left employment. Held, as was not dismissal by reason of redundancy.

Diminished need

Lesney Products & Co Ltd v Nolan [1977] IRLR 77, CA: no redundancy where hours of work of employees reduced by a cut in overtime, where work requirement was unchanged and the need for employees remains constant.

Cowen v Haden Carrier Ltd [1983] ICR 1, CA: the meaning of redundancy. Whether contractual duties are diminished. All terms of employment must be considered in order to discover whether an employee has been made redundant.

Hindle v Percival Boats [1969] 1 WLR 174, CA: the tribunal has a duty to look at facts objectively to discover true causes of dismissal, in order to discover whether there was redundancy.

Dismissal

Carry All Motors v Pennington [1980] IRLR 455, EAT: where the work of two employees is merged to create one new job to be done by one of them, then the other dismissed employee is made redundant. Although workload has remained constant, the number of employees required has diminished.

Pillinger v Manchester Area Health Authority [1979] IRLR 430, EAT: an employer cannot automatically dismiss employees where funds run out or are withdrawn. Employers should look for other funds or ask employees to accept lower-paid work. Failure to do so can make dismissal unfair.

North East Coast Ship Repairers Ltd v Secretary of State for Employment [1978] IRLR 149, EAT: an employer’s inability to employ an apprentice after the end of fixed-term apprenticeship contract is not in itself a dismissal for redundancy.

Offer of alternative employment

Cambridge and District Co-operative Society Ltd v Ruse [1993] IRLR 156, EAT: an employee’s personal perception of alternative employment offered may amount to reasonableness.

Presumption of redundancy

Willcox and another v Hastings [1987] IRLR 298, CA: Where two employees dismissed at same time, one because of diminution in requirements for employees and one not, and tribunal cannot decide which is which, then the dismissal will be presumed to be because of redundancy unless the contrary is proved.

Rationalisation

Banerjee v City and East London Area Health Authority [1979] IRLR 147, EAT: employer must bring evidence of significance of rationalisation, reasons for rationalisation and reasons for which dismissal was necessary.

Strikes

Simmons v Hoover Ltd [1976] IRLR 266, EAT: an employee serving out notice of redundancy was dismissed for taking part in strike. Held, accrued right to redundancy payment survives second dismissal.

Transfer of undertaking

Crompton v Truly Fair (International) Ltd [1975] IRLR 250, High Court: company sold one factory. The new owner retained all staff but manufactured a different product. Held, as no “transfer”. Employees could claim redundancy payments from old employer.

Pickwell v Lincolnshire County Council [1993] ICR 87, EAT: employee worked at a school which had been funded by local authority but which became grant-maintained. Held, continuous employment for purpose of redundancy pay.

Warnings

Gray v Shetland Norse Preserving Co Ltd [1985] IRLR 53, EAT: it is the duty of an employer to give as much notice as possible of impending redundancies. This does not extend to warning an employee that poor attendance record may lead to selection for redundancy.

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