REDUNDANCY

Given the current economic climate, it seems an opportune time to go over the basics of the law regarding redundancies.

What is a redundancy?

A redundancy situation occurs when an employee is dismissed because the business as a whole, or the particular workplace where the employee worked, is reducing in size or has closed down. Likewise if there has been a reduction in the size of the workforce needed to do work of a particular kind, there is a redundancy.

Who can claim redundancy pay?

Anyone who is an employee can claim redundancy pay if they have been employed for at least two years. Employees are entitled to the following, up to a maximum of 20 years:

• up to age 21 - half a week’s pay per year of service
• age 22 to 40 - one week’s pay per year of service
• age 41 and over - one and a half weeks’ pay per year of service

To calculate the statutory redundancy pay due to your employee, go to:
www.berr.gov.uk/whatwedo/employment/redundancy/index.html
and click on "redundancy calculator" in the first paragraph.

What is suitable alternative employment?

As an employer, you have to take reasonable steps to find alternative employment that would be suitable for that employee. Otherwise the dismissal may be unfair. You do not, however, have to create a new job for them.

If you own a group of companies, then you should also look in those associated companies for alternative work. The job should be of similar status and pay, but even if is not, you should still offer it in case the person wants to accept it.

Did you act reasonably?

Even though redundancy is a potentially fair reason for dismissal, an employee may still be able to bring a claim for unfair dismissal if you acted unreasonably, say, in terms of the selection criteria that you adopted. The courts have said that:

• employers must give as much warning as possible of impending redundancies
• employers should agree with the union (if there is one) the criteria to be used in selecting employees
• employers should agree criteria that can be objectively checked against evidence such as attendance records, length of service etc
• employers should ensure that the selection is made fairly in accordance with the criteria
• employers need to consider if they could offer alternative employment

You need to begin the process by defining the appropriate pool from which to select the redundant workers. If there is an agreement with the trade union which specifies the pool, you should follow that.

What selection criteria should you use?

The selection criteria must be objective, non-discriminatory and applied consistently. The following can be used:

• Skills and knowledge. These have to be assessed objectively, so ambiguous terms such as “attitude to work” should be avoided. In most situations, this will be the most critical criteria
• Standard of work. If someone’s work has been assessed as below standard during performance reviews, then this is likely to be something that you take into account when seeking candidates for redundancy.
• Accurate attendance records. These should not be the sole criterion for redundancy, as one long (but legitimate) period of absence may distort an employee’s otherwise unblemished record. You also have to consider whether to discount disability-related sickness absence when assessing attendance as a reasonable adjustment. And you cannot include breaks for maternity, paternity or adoption leave
• Sickness record. It is fair enough to take someone’s sickness record into account in the selection process, but you should consult the employee and consider offering them alternative employment, if any exists. Otherwise the dismissal may be contrary to the Disability Discrimination Act.
• Disciplinary record. An employee with a poor disciplinary record is bound to be considered a likely candidate for redundancy.

Did you consult?

You have to consult with trade unions and individual employees. Tribunals will decide whether it was adequate or not on the basis of the facts before them. Employers with 50 or more employees now also have to take into account the Information and Consultation Regulations 2004.

What information do you have to disclose to employees?

You have to disclose:

• reasons for the proposed redundancies
• numbers and descriptions of employees affected
• proposed method of selecting the employees who may be dismissed
• proposed method of carrying out the dismissals, taking account of any agreed procedure, including the period over which the dismissals are to take effect
• how redundancy payments, other than the legal minimum, will be calculated

If an employee believes that you have treated them unfairly in the assessment process, they are entitled to see their own assessments, prior to a final decision being made. Generally, they will not be allowed to see the assessments of others who have been retained unless they can point to a particular employee who they claim should have been selected instead of them.

If the employee does not agree with the assessment, it is good practice to offer an appeals procedure.

Can you dismiss a pregnant employee?

It is automatically unfair to select a woman for redundancy because she is pregnant, has given birth or taken maternity leave. This right applies irrespective of an employee’s length of service or hours of work. Any woman made redundant during her maternity leave is entitled to be offered suitable, alternative work.

Although you have a general obligation to offer alternative work before dismissing employees, women on maternity leave must be given the first offer of any vacancy. If you fail to do so, you may face a claim of sex discrimination and unfair dismissal.

Did you follow the disputes resolution procedure?

If you dismiss someone for redundancy and do not comply with the requirements of the statutory dismissal and disciplinary procedures, then the dismissal will be automatically unfair. The only exception is when you have to collectively consult with the relevant union/s when making more than 20 employees redundant.

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RACE RELATIONS

The law states clearly that employers cannot directly discriminate against job applicants because of their race. In Centrum voor gelijkheid van kansen en voor racismebestrijding v Firma Feryn NV, the European Court of Justice (ECJ) said that there does not always have to be an identifiable complainant for discrimination to have taken place.

What happened?

In early 2005, Firma Feryn NV (a Belgian company) advertised for fitters to install doors at customers’ houses by putting a large "vacancies" sign outside its premises.

Despite the fact that it was having trouble recruiting, one of its directors stated publicly on national television and in newspaper interviews in April 2005 that the company would not employ any "immigrants" because customers did not want them in their homes.

The Belgian court dismissed a claim for discrimination by a Belgian equal opportunities organisation, saying that "there was no proof nor was there a presumption that a person had applied for a job and had not been employed as a result of his ethnic origin".

The court referred the case to the ECJ to determine if the company’s public statements constituted direct discrimination under the 2000 European Directive outlawing discrimination on the grounds of racial or ethnic origin.

The ECJ said that although article 2(2)(a) defines direct discrimination as a situation in which "one person is treated less favourably than another... in a comparable situation", that does not mean there always has to be an identifiable complainant for a claim to come within the scope of the Directive.

It concluded that "The fact that an employer declares publicly that it will not recruit employees of a certain ethnic or racial origin, something which is clearly likely to strongly dissuade certain candidates from submitting their candidature and, accordingly, to hinder their access to the labour market, constitutes direct discrimination...", even if no particular complainant could be identified.

It also said that if employers make public statements to the effect that they will not recruit "employees of a certain ethnic or racial origin" that will be enough to raise a "presumption of the existence of a recruitment policy which is directly discriminatory within...Directive 2000/4. It is then for that employer to prove that there was no breach of the principle of equal treatment. It can do so by showing that the undertaking's actual recruitment practice does not correspond to those statements."

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ANON

Section 1(1) of the 1998 Data Protection Act (DPA) defines personal data as data relating to a living individual from which they can be identified, along with any other information held by the data controller. In Common Services Agency v Scottish Information Commissioner, the House of Lords said that even if the information is "anonymised", it still constitutes personal data.

What happened?

In January 2005, a researcher for a member of the Scottish Parliament made an application to the Common Services Agency (which collects statistical information on health) under the Freedom of Information (Scotland) Act 2002 (FOISA).

The Agency refused to give him the information saying that some individuals might be identified and that it would therefore constitute personal data under section 1(1) of the DPA making it exempt from FOISA.

Following rulings by the Scottish Information Commissioner and the Scottish Court of Appeal that the data could be disclosed if it was "barnardised" (a statistical process that artificially alters data without distorting it), the House of Lords overturned their rulings. It said that the information still constituted personal data under the DPA.

It said the question was "whether the data controller, or anybody else who was in possession of the barnardised data, would be able to identify the living individual or individuals to whom the data in that form related." If the recipient could not identify anyone from it, then it would not constitute "personal data" in his hands.

But what about the agency? As it had access to all the statistical information from which the barnardised information would be derived, it was obvious that it would be able to identify the individuals concerned. That did not mean, however, that it could not process the information in such a way that it became data "from which a living individual can no longer be identified".

The House of Lords accepted that "if barnardisation can achieve this, the way will be then open for the information to be released in that form because it will no longer be personal data." This, however, was a question of fact for the Information Commissioner to rule on.

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IN BRIEF

After a long wait, the Advocate General of the European Court of Justice (ECJ) has given his opinion in the challenge brought by Heyday (an offshoot of Age Concern) against the requirement in the 2006 age regulations for employees to retire at 65.

He recommended that the ECJ rejects the challenge when it comes to consider the case later in the year. Although his decision is not binding, it is often followed by the Court.

The Advocate General said that the rule in the age regulations allowing employers to dismiss employees when they get to 65 or over (as long as the reason is for retirement reasons) can be justified and is not incompatible with the terms of the Equal Treatment Directive.

According to the Employment Tribunals Service, there are about 260 cases in England, Scotland and Wales that have been stayed and are waiting for a definitive decision from the ECJ. It is likely to make a ruling in December.

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