Employment Law - Guide to the rules on redundancy

GP practices must ensure they act correctly in any redundancy situation, advises Rayner Jones.

Over the past few months and due largely to deteriorating financial circumstances, some practices have taken the tough decision to make a member of the practice staff redundant.

This trend is likely to continue, but practices should beware making a bad situation worse by falling foul of the law on redundancy.

Is there a redundancy situation?
The employer needs to consider if there is in fact a redundancy situation and, if so, whether the staff member(s) concerned will accept redundancy as the reason for their dismissal.

If you make someone redundant but an employment tribunal finds that there was not in fact a redundancy situation, or that redundancy was not the real reason for dismissal, then the dismissal could be unfair and leave you open to a claim for compensation.

Special rules apply for employers making 20 or more redundancies. However it is unlikely that even the largest practices will have to make 20 staff redundant at the same time.

Do you have a policy?
Does your practice have a binding redundancy policy that might tie your hands regarding selection criteria? Will you have to make redundancy payments that are above the statutory minimum, for example?

You should consider alternatives to redundancy. Can you avoid recruiting outside the practice if an essential post needs filling? Reducing or stopping overtime working also cuts staff costs. However, asking staff to accept a cut in basic salary will be highly unpopular.

Unless you are bound by a redundancy policy to ask for volunteers, doing this is generally not a good idea. Those volunteering may be staff you do not want to lose, and asking for volunteers causes delays.

Is a staff 'pool' needed?
You should work out whether you need a pool of employees from which to select who will be made redundant. Even if you have, say, just two people doing the same job and you want to make both jobs redundant, it does not necessarily follow that those two staff should be the individuals selected.

There might be other staff doing a similar work, or with similar skills who should go into the pool.

You can keep employees out of a pool if, for example, they have essential skills you cannot afford to lose, or they are a settled team that you do not want to break up.

A pool is not required if the person you are making redundant is in a unique position and their duties or skills are not interchangeable with those of other staff.

How to choose your selection criteria

If you have a pool you need to have some selection criteria. These often include key skills, attendance and disciplinary records and work quality/performance. The idea is to be as objective as possible.

In the absence of evidence that the employer chose criteria to 'fix' the result, employment tribunals will normally accept them unless they are blatantly unfair.

When choosing criteria and scoring employees against them, be careful to avoid accidental illegal discrimination.

Mark each employee in the pool against the criteria. Normally two or more managers (at a GP surgery, the practice manager and one or two partners, say) should do this, particularly if some criteria are subjective. Do a mock scoring exercise first to check your selection criteria meet the needs of the practice.

Breaking the news
If you have a pool, do this when the scoring has been done and one or more employees have been provisionally selected for redundancy. Or, do this once you have decided there is no need for a pool. You should inform those selected in writing. The letter can be handed over at an initial informal meeting.

In the letter, explain how the provisional decision has been arrived at and, if there is a pool, enclose a copy of the employee's score sheet. Consider including details of an enhanced redundancy payment in addition to their basic entitlements in the event that they are made redundant, but do make it clear that enhancement is conditional on the employee signing a 'com-promise agreement'.

If the staff member agrees to sign, this can cut short the process and prevent claims for unfair dismissal.

What about alternative employment?
You need to have at least one or two meetings with each individual selected to explain your redundancy proposals, to give the employee the chance to challenge them, and to look at alternative employment opportunities within the practice.

The consultation period should be for a minimum one or two weeks (unless the employee wants to cut it short) and will involve at least one meeting. Although you will want to keep other employees informed, there is no need to consult everyone in a pool - just those selected,

Employers are legally obliged to look for and offer any suitable vacancies to staff selected for redundancy.

Redundancy pay
Consultation will end with the employee either signing a compromise agreement or being dismissed with the right to appeal - with or without an offer of alternative employment.

Even if the employee accepts an alternative job, they can still bring a claim of unfair dismissal arising from the way their previous job was terminated.

They are entitled to notice or pay in lieu of notice and a statutory redundancy payment.

If you have a redundancy policy offering better terms, this will apply instead of the statutory minima for notice and pay.

Redundancy handling booklet
Questions for practices

  1. Do you have a redundancy situation?
  2. Will redundancy be accepted as the reason for dismissal?
  3. Is there an alterative to redundancy?
  4. Do you need a 'pool'?
  5. If you need a pool, are your redundancy criteria fair and non-discriminatory?
  6. Is it a good idea to offer an enhanced redundancy pay-off?

Mr Jones is a partner specialising in employment law at Lester Aldridge LLP Solicitors, Bournemouth, www.lesteraldridge.com


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