Key changes to redundancy consultation, selection and pay

Originally posted on 17 Dec 2013

In an interesting article published on 16 December 2013, Roland Doughty (a partner at lawyers Slaughter and May) looks back on the most important developments of the last 12 months in legislation and case law on redundancies. His article is published in People Management, here.

Extracts from what he wrote are:

Collective consultation:
•    In April, the minimum consultation period for an employer proposing 100 or more redundancies was reduced from 90 to 45 days. The same reduction was made to the period of notice which employers must give to the Department for Business, Innovation & Skills (BIS). At the same time, the expiry of fixed-term contracts was excluded from the collective redundancy rules.

•   In November, BIS published draft regulations, due to take effect in January, altering how TULR(C)A provisions apply in a Tupe context. The amendments allow transferees to start collective redundancy consultation before a transfer takes place, if the transferor agrees and various notification requirements are met.

Selection
Two EAT decisions this year have provided useful guidance on the difficult process of selecting employees for redundancy:

•    In Mental Health Care (UK) Ltd v Biluan, the EAT criticised the employer’s use of forward-looking selection criteria which were normally used in recruitment exercises, and which gave no consideration to past performance. It concluded the dismissals based on such criteria were unfair.

•    More recently in Jackson v Stephensons College, the EAT criticised an employer’s decision to reject an applicant for voluntary redundancy and make a colleague compulsorily redundant in his place. Again, that dismissal was found to be unfair.

Redundancy pay
As well as the usual increase to the maximum amount of statutory redundancy pay (which now stands at £13,500), 2013 saw some key cases on the calculation of enhanced redundancy pay, and the risk of age discrimination which accompanies such payments.

Many enhanced redundancy schemes award larger sums to older workers, to reflect the perceived difficulty such workers face in securing alternative employment. The Court of Appeal has recently rejected an argument that such a scheme constituted unlawful age discrimination against younger workers, finding it to be objectively justified (Lockwood v Department for Work and Pensions).

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