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Redeployment and redundancy guide

Overview

This guide is intended to help manage the redundancy process successfully. Please read this guide alongside the formal Redeployment and Redundancy policy. This guide does not cover redundancies under Fixed Term Contracts (FTC).

Separate guidance notes are available on redundancy selection criteria.

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Definitions and explanations

Under section 139 of the Employment Rights Act 1996, as amended, which deals with the right to a redundancy payment, an employee is “taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to:

  • the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased, or intends to cease, to carry on that business in the place where the employee was so employed
  • the fact that the requirements of that business for employees to carry out work of a particular kind, or for employees to carry out work of a particular kind in the place where he was so employed, have ceased or diminished or are expected to cease or diminish.”

However, there is a wider definition of redundancy for consultation purposes. Under section 195 of the Trade Union and Labour Relations (consolidation) Act 1992 as amended (TULR(C)A):

“the references to dismissal as redundant are references to dismissal for a reason not related to the individual concerned or for a number of reasons all of which are not so related”.

These definitions apply to the Commission’s Policy and Guidance. Gender specific references are as stated in the Act.

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Introduction

The Commission must be informed as soon as there is the likelihood of any redundancies.

There is a legal obligation for establishments to notify the Secretary of State for Business, Innovation and Skills, in writing, of 20 or more redundancies at an establishment. Notification is conveyed to the Secretary of State for Business, Innovation and Skills, using form HR1, which is obtained from The Insolvency Office and returned to the Redundancy Payments Office. A copy must also be sent to the appropriate trade union. The minimum time limits for notification are:

  • 100 or more employees at one establishment within a 45 day period or less: 45 days before the first dismissal
  • 20-99 employees at one establishment within a 90 day period or less: 30 days before the first dismissal.

An establishment which fails to meet the notification requirements may be fined £5,000 by the Department for Business, Innovation and Skills.

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Pre-redundancy measures

It is legitimate, on an individual post basis, to consider the scope for redeployment (with or without retraining) as a pre-redundancy measure. This can take place at any time and may be prior to any formal consultation about possible post losses or redundancies. Redeployments which result from this process do not have to be discussed formally with Staff Side or the Trade Union, but it would normally be appropriate to bring such matters to their attention.

Management must also consider ways to avoid redundancies wherever possible and, if redundancies are unavoidable, to minimise the numbers. The following pre-redundancy measures must be considered:

  • achieving some/all of the required reductions through natural wastage 
  • restricting or suspending external recruitment 
  • reviewing the employment of agency staff 
  • reducing overtime 
  • recalling sub-contract work where practicable 
  • inviting volunteers for part-time or job share work 
  • redeploying and retraining employees
  • transferring work between offices.

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Formal redundancy situations

Formal consultation with the Trade Union and with individuals is essential in the following situations:

  • where a post loss is involved, the post is occupied and the post holder has not asked to be considered for voluntary redundancy 
  • where an individual post loss forms part of a wider formal review of costs or activities
  • where the post loss forms part of a restructuring exercise or
  • where it is expected that redeployment will prove difficult and a redundancy may result.

Such consultation triggers what is usually referred to as a ‘formal redundancy situation’.

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Consultation in  formal redundancy situation

Management must advise the Trade Union and Staff Side of the extent of the problem which could result in a redundancy situation and the areas of work affected. If there are to be post losses with the possibility of redundancies then consultations must begin at the earliest possible opportunity. This requirement applies regardless of the scope for meeting the post losses by voluntary means. Management must make it clear that the formal consultation process, under the first paragraph of the consultation section of the policy, is commencing.

Management and the Trade Union and Staff Side may wish to identify confidentially individuals who would wish to be considered for redundancy.

Consultation with the Trade Union and Staff Side

If the Commission’s financial position or a restructuring decision may result in the loss of occupied posts and there are no immediate redeployment prospects, management should provide specific information to the Trade Union and Staff Side. This will be at a meeting arranged for this purpose.

Wherever possible, the following information should be disclosed at this meeting. If all the information is not available, further formal meetings must be called, in order to give the Trade Union and Staff Side the opportunity to comment and to seek additional information about the redundancy situation. The information to be disclosed is:

  • the reasons for the redundancies
  • the numbers and descriptions (ie job titles and area of work) of the individuals occupying the redundant posts 
  • the total number of employees currently employed , broken down by location and job titles.
  • the proposed selection pool and the criteria for selecting the individuals who may be dismissed. Any representations made by the Trade Union or Staff Side in relation to the selection pool, the criteria for selection for redundancy, the operation of selection matrices and the scoring and weighting arrangements will be carefully considered by Management. Further information on selection criteria is contained in the guidance notes
  • how the procedure will be implemented, including calls for volunteers, notice periods, investigation of redeployment opportunities
  • the proposed method of calculating any redundancy payments 
  • information about management's efforts to apply pre-redundancy measures.

This meeting must be fully minuted.

Staff representatives have a minimum of 10 working days in which to comment or make representations, after which time another formal meeting should be convened. Full minutes must be drawn up. It is important that consultation is entered into in good faith, and management is required to give careful consideration to any trade union proposals. Consultation has to be clearly genuine and while it may not always be possible to reach an agreement, this should always be the objective of any discussions. If agreement is not reached, clear reasons must be given in writing for rejecting Trade Union and Staff Side proposals. Where it has not been possible to provide all the information listed above, at one meeting, further meetings will be offered and reasonable consultation periods allowed.

At both meetings consultation must include ways of avoiding any redundancies, avoiding compulsory redundancies, reducing the numbers involved, and mitigating the effects of any redundancies. Possible ways of avoiding or reducing the level of dismissals might include natural wastage, redeployment, suspending recruitment, reducing overtime or reviewing the use of contract work. Even if dismissals are unavoidable consultation should address the ways in which it may be possible to reduce the impact on employees, for example by offering resettlement training, assisting with the costs of retraining, etc.

Consultation with individuals

Consultation with the individuals who are at risk of redundancy as a result of the process outlined above (the application of selection pools, selection criteria and – where applicable - selection matrices) should begin when consultation with the Trade Union and Staff Side is completed.

The first meeting

At the first meeting, the individual(s) will be advised (in writing and at this initial formal meeting) of the impending redundancy of their post(s), and told that they are formally "at risk" of redundancy. The written information they are given will:

  • explain why the requirements for the work have ceased or diminished (justifying a post loss) and give the full reasons for the preliminary identification of the individual as redundant, including the details of the selection criteria used. The criteria will be objective and relevant. Where the individual has been selected from a group of employees undertaking broadly similar work, the relevant selection will be provided.
  • set out any preliminary consideration for redeployment within the office or more widely throughout the Commission. 
  • provide an estimate of redundancy compensation.

If they wish, they may be accompanied to this meeting by their trade union representative or a work colleague.

Individuals must then be given a minimum of five working days from the date of the first meeting in which to make representations on measures to avoid redundancy, eg redeployment, retraining, part-time working etc. They may also contest their selection for redundancy or challenge the selection criteria; they may suggest alternatives.

The second meeting

A second formal meeting will then be held to hear and respond to the individual's representations. If they wish, they may be accompanied by their trade union representative or a work colleague.

This second consultation meeting involves a discussion about any potential alternatives to redundancy and involves answering any questions that may be put by the individual or their representative. The individual and their representative must be given every opportunity to raise any issues that they consider to be appropriate whether these concern the rationale for redundancies or the basis for selection for redundancy or any other matter. Key points and actions must be recorded and copied to the individual. If issues arise that cannot be answered at the meeting, management must agree to investigate matters and to write a response following the meeting. At the end of this second meeting, the individual and their representative will be advised that a third formal meeting will take place a minimum of five working days hence.

The third meeting

At the third formal consultation meeting, the individual and their representative will be invited to make any further representations about the redundancy proposal. Management will give careful consideration to any representations from the individual and a written response will be provided. The employee has the right to be accompanied by a Trade Union representative or work colleague at this meeting. If a call for volunteers for redundancy has taken place, the individual will be given management's reasons for not accepting a volunteer, where this is relevant to the case. If the representations are not supported and no suitable redeployment opportunities are identified, redundancy will then be confirmed and formal notice of redundancy issued at this point.

On receiving formal notice of redundancy, the individual will be given five working days to consider the following options:

i.   to lodge a formal appeal against their redundancy; grounds for appeal might include unfair selection for redundancy, inappropriate selection criteria, work has not stopped, redeployment oppourtunities have been denied

ii   to seek redeployment

iii  to accept their redundancy.

Options

Options (i) and (ii) can be chosen simultaneously. In the case of an appeal, the employee has five working days from the date they receive their formal notice of redundancy in which to construct their appeal.

In the case of a redeployment request, redeployment within the employee’s office is dealt with by the appropriate Deputy in consultation with local Trade Union and Staff Side. However, if the individual wishes to be considered for redeployment elsewhere, the Deputies Group will consider the request.

An individual can withdraw their appeal and/or request for redeployment at any time.

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Payment in Lieu of Notice (PILON)

If an individual does not appeal or seek redeployment or if their appeal/redeployment request has been dealt with, management has discretion to terminate their appointment in advance of their contractual termination of notice date, subject to making a payment for PILON.

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Gardening leave

Management may decide that there is insufficient work for an individual or there are security or other considerations which indicate that the individual should not remain on site while their redundancy is being processed. In such cases, management has the discretion to require the individual to take paid leave of absence, sometimes known as "gardening leave". In this event, management must ensure that their decision is conveyed in a sensitive and supportive manner by the Deputy or another senior member of management. The local TU and Staff Side representatives must be informed in advance. Management must also make sure that the individual has reasonable access to:

  • their trade union/staff side representatives 
  • resettlement training and counselling services
  • employment policies and procedures
  • facilities which they may need to construct an appeal, to help with job searches or for other purposes linked to their redundancy.

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Calls for volunteers for redundancy

Once management has identified that a redundancy situation exists and consultation with the Trade Union and Staff Side begins, the following actions may be taken, where the appropriate circumstances apply:

  • a notice to all employees warning them about the possibility of redundancies
  • informal sounding and/or an informal approach to any employee who might be prepared to volunteer for redundancy. This can be undertaken by management and/or the Trade Union and Staff Side, if the latter, the Trade Union and Staff Side would subsequently submit a list of names to management on a confidential basis
  • an organisation-wide or restricted call for volunteers. This would normally take place unless numbers of post losses are very small (say five or less) and/or are in such specialised areas that there can be no reasonable prospect of finding a suitable “match” between the volunteer(s) and the individual(s) occupying the redundant post(s). The Trade Union and Staff Side must be consulted in these circumstances, before a decision not to make a call for volunteers is confirmed.

Staff who volunteer for redundancy are not guaranteed to have their application accepted. Management reserves absolute discretion to decide whether or not to accept any individual application for redundancy. The decision as to whether or not to accept a particular application will depend on the Commission’s need for the types of knowledge and skills that are believed to be essential to meet its future business aims , the need to retain a balance of people with different skills, and the overall situation at the time. Management’s decision on whether or not to accept or reject any particular application is final.

Volunteers for redundancy cannot retract their wish to be made redundant once they have been given formal notice of redundancy.

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Outplacement assistance

The HR department will provide or arrange counselling and other assistance to those facing redundancy.

All employees under notice of redundancy are entitled to reasonable outplacement assistance. This can comprise:

  • job hunting and applications 
  • interviews skills 
  • career counselling
  • stress management 
  • state benefits.

Management will seek to contact other similar organisations to ascertain if there are any suitable vacancies.

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Compensation

To enable those affected to make fully informed decisions, they must be given a formal estimate of their redundancy compensation at the same time as they are consulted about their redundancy. Such estimates can only be provided by HR. Individuals should be reminded that this is only an estimate and that the final payment may differ, depending on their actual last day of service and on any subsequent changes in pay. Any enquiries on this should be addressed to HR.

Those to be made redundant should be reminded that if, at some future date, they are re-employed to an establishment/organisation under the same pension scheme, certain compensation payments made at the time of dismissal may be affected; in particular they may be obliged to repay some or all of any lump sum. Any enquiries on this should be addressed to LPFA.

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Redeployment

The scope for redeployment to avoid compulsory redundancy will always be carefully considered by management. Employees at risk of redundancy will be given every consideration for vacancies which exist at the time their possible redundancy is being considered or at any stage in the redundancy process prior to their leaving employment.

The underlying principles are:

  1. Compulsory redeployment must be to a post which can be described as “suitable alternative employment”. This is not a precise concept and what is “suitable” will depend on the nature and status of the work offered, on the background and skills of the redeployant and on any implications for the conditions of service
  2. greater flexibility exists if the redeployant accepts an alternative post voluntarily; ie the definition of “suitable” can be drawn more widely if it is not disputed
  3. an appropriate trial period should be used for redeployments where the redeployant’s knowledge, skills and experience are not directly comparable to those specified for the new position. In certain circumstances, a trial period is a legal right
  4. in certain circumstances, downgrading to a lower graded post may be seen as a way of avoiding a compulsory redundancy. This can only be with the at-risk individual’s agreement. (If a member of staff who would otherwise be dismissed as redundant transfers to a post at a lower grade, their salary will continue to be paid at the higher level for three years from the date of the transfer. The member of staff will continue to receive the annual salary award, but increments will not be paid during the period. At the end of three years, the member of staff’s salary will be reduced to the maximum of the lower grade, and they will thereafter receive the annual salary award for that grade.)

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Consultation with employees about redeployment

Employees who are at risk of redundancy should be given as much notice as possible of the situation, so that they can immediately begin to consider their options, including their own wishes as regards redeployment and/or retraining. Where this consultation is taking place, but the individual has not yet received formal notice of redundancy, s/he should be given every encouragement to consider redeployment options. The individual must be given an up to date vacancy list.

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Trial periods

An employee at risk of redundancy may be offered work which is subject to different terms and conditions, or is in a significantly different area of work than their existing post. This provision is offered on a (statutory) minimum trial period of 20 working days in the first instance (it may be extended subject to mutual agreement). Individuals will not be deprived of their right to redundancy compensation should they or management decide that the post is unsuitable, by reason of capability, location, or terms and conditions. In cases where management consider the post has been unreasonably refused, the employee may lose their right to redundancy pay. HR should be consulted in all cases where it is thought that a trial period is necessary.

A trial period will not normally be appropriate where the work is deemed by management to be “suitable alternative employment”.

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Retraining

Management should carefully consider retraining possibilities/options. The general principle is that retraining which takes less than six months should be encouraged and supported, where this will avoid a redundancy.

Transfer terms

Employees who are at risk of redundancy are eligible for removal expenses if they redeploy to another office site which is not within daily travelling distance of their main private residence. See annex 3.

Employees who are at risk of redundancy who do not need to move their main residence are eligible for allowances specified in annex 4.

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Periods of notice

All staff will be entitled to their contractual notice provisions.

Management may terminate employment before the formal notice expires, in which case payment in lieu of notice (PILON) will be paid. Employees will be advised that, in such circumstances, they are not entitled to unemployment benefit until their notional period of notice has expired. National Insurance contributions may be payable during this period and employees should be advised to seek guidance from the Department for Work and Pensions.

Employees who give notice to terminate employment before expiry of their notice of redundancy will not normally lose entitlement to a redundancy payment. However, PILON will not be payable in this situation.

During the period of notice, a reasonable amount of time off on full pay should be given for job interviews. Attending external interviews must not prejudice an individual's chances of internal redeployment.

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November 2010 (revised April 2013)

Date Updated: 05/04/13