DEALING WITH REDUNDANCY

Introduction
Trade unions have an important role to play in redundancy situations. It is a role defined partly through normal bargaining processes.

Trade Unions can:

  • Try to avoid or limit the impact of redundancies,
  • obtain better redundancy terms,
  • ensure fairness.

Avoiding Redundancy
The key to avoiding redundancy is to act early, ideally this means negotiating avoidance measures into redundancy agreements.

Reps need also to be aware of the performance of the company and to look out for problems with workloads. If you detect a problem, check out things like orders, sales and profitability. Help with this can come from the GFTU via your union's head office.

You need to raise these matters with your employer at the earliest opportunity and negotiate steps which can be taken before the need for redundancies is reached. The aim is to make compulsory redundancies the last resort. It is advisable to take a positive approach to the negotiation and to suggest alternative strategies. These may include:

  • Stop further recruitment,
  • reduce overtime working,
  • redeploy and retrain workers,
  • stop using outside contractors,
  • job sharing,
  • short time working,
  • temporary lay-offs,
  • early retirement,
  • voluntary redundancy.

Job Security Agreements
These agreements set out job loss avoidance measures such as consultation, selection criteria and enhanced redundancy pay.

The Blue Circle job security agreement is a controversial development where apparent job guarantees have been exchanged for wage restraint. Again, more information about such agreements can be obtained from the GFTU via your union's head office.

Consultation
The law relating to consultation on collective redundancies has changed recently. The law now states that where an employer is proposing to make 20 or more employees redundant at one establishment within a period of 90 days or less, he shall consult with the "appropriate representatives" of any employee who may be dismissed. The appropriate representatives are either:

  1. The representatives of a recognised trade union, or,
  2. employee representatives specially elected for the purpose of being consulted about the redundancies.

The consultation must begin in good time and there are some minimum periods set out:

  • 20 to 99 proposed redundancies: 30 days advance consultation.
  • 100 or more proposed redundancies: 90 days advance consultation.

The employer must consult about:

  • Ways of avoiding the dismissals,
  • reducing the numbers of employees to be dismissed,
  • mitigating the consequences of the dismissals.

Consultation must be conducted by the employer with a view to reaching agreement with the appropriate representatives.

In consultations the employer must disclose:

  • The reason for the redundancies,
  • the numbers and description of the workers concerned,
  • the total number of workers of that description,
  • the proposed selection procedure,
  • the proposed method of carrying out the dismissals and the timescale involved,
  • the method of calculating any redundancy pay, except statutory redundancy pay.

The employer is required to consult in respect of collective redundancies where the dismissals are for reasons not related to the individual concerned.

It is essential in negotiated agreements that it is stated clearly that trade union reps are the appropriate representatives. It is also important to negotiate consultation rights where less than 20 employees are to be made redundant.

Individual Rights
A dismissal for redundancy will only be fair if:

  • There was adequate consultation with the employee and/or his trade union rep,
  • that the system for selection was fair,
  • that there was no suitable alternative employment.

Breach of these requirements may allow the employee to bring a claim for unfair dismissal in the Industrial Tribunal.

There is no absolute requirement that an employer keeps to a customary agreement on selection - only that the selection is fair.

Some reasons for selection, such as sex or race, are automatically unfair. Advice on these should be sought from your union office.

Redundancy Pay
Statutory redundancy pay is available to employees (both full-time and part-time) who have 2 or more years continuous service.

The statutory scheme is based on age and length of service. The present maximum is £6300. Negotiated agreements should try to improve upon the statutory scheme.

CHECK-LIST

  • Keep an eye on orders, profits etc.
  • Negotiate a job security agreement.
  • Raise any problems of orders with your employer.
  • Insist on your legal rights.
  • Inform your union office.
  • Try to negotiate better redundancy terms.
  • Insist on a fair selection procedure.
  • Keep members informed.

 

For further information about redundancy contact your union office.

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