Published on Nov 11, 2024
We operate in turbulent times. We have had a recent change of government, Europe has been watching a war between Ukraine and Russia, a new President has been elected in the US, and there is a war taking place in the Middle East, demonstrating ongoing tensions between Palestine and Israel. No-one can argue that there is no turbulence.
Organisations are affected by this turbulence in different ways. Sometimes it can be the loss of business, due to the tensions that are happening internationally. Sometimes it can be the cost of operating – for example, the increased cost of gas and oil due to the Ukraine/Russia conflict. Sometimes it is simply that customers are less confident and decide not to buy goods that they see as non-essential. However well run an organisation is there are times that it might face conflict.
In the midst of this turbulence organisations need to manage their people. An important part of doing this is to keep talking to employees, and to consult with them. This was demonstrated in the recent case of Valimulla v Al-Khair Foundation [2024].
Valimulla was a Liaison Officer, covering the North West of England. The organisation was facing a downturn in work, and it was decided that there was a need for a redundancy. There were Liaison Officers working elsewhere in the country, but just Valimulla was put at risk of redundancy. The organisation met with him and consulted with him about his own situation. However, there was no consultation about the selection pool (should the other Liaison Officers have been put in a selection pool with him) and there was no consultation about the process of selection. The subsequent dismissal for redundancy was unfair.
What should the organisation have done? If they were clear that the job in the North West needed to go, then did they really need to disrupt the other Liaison Officers and give them an uncertain time of facing potential redundancy? If they had consulted over the redundancies when should this have started? How long did they need to consult for, and who should they have consulted with? If they had consulted with the Liaison Officers, would that have just resulted in everyone trying to protect their own employment?
There are a lot of questions here, and this demonstrates the complexity of managing a redundancy process fairly. There are a lot of facts to take into consideration, and getting it wrong can lead to a successful claim of unfair dismissal.
Of course, redundancy is not always going to be the solution in a restructuring. It could be that part or all of a business is being sold to a new employer, or there is a change in a service provider. Here we need to consider whether there is a transfer of undertaking. If there is, there is a process that must be followed to manage this lawfully.
Sometimes the situation can be managed without any job loss, or change of employer. It might be possible to make short term savings by altering hours of work, stopping bonus payments or closing sites. If the employees are going to be staying with the organisation this is going to result in a variation of their contracts, and the employer cannot just do this without following a fair process.
Unfortunately, organisations operating in these turbulent times are likely to be facing one of these processes, and therefore they need to understand how to manage the situation lawfully.
Join us for a half day on-line training session to learn all you need to know to be compliant when managing a redundancy, transfer of undertaking or variation of contract. Navigating Organisational Change: The People Aspect of Managing a Restructure presented by the expert trainer, Kathy Daniels, are on 16 January 2025, 15 May 2025 and 18 September 2025.
Published on Nov 11, 2024 by Kathy Daniels