As job losses continue apace in the public sector, it is worth employees seeking advice on where they stand and even on what some of the terminology means. Mohini Bharania, a solicitor in the employment team at Russell Jones and Walker, explains

Confidence is at low ebb in the public sector with 40 per cent of public sector employees believing that that their employer is planning on making further redundancies in the workplace. A recent survey showed that 26 per cent of public sector employees reported redundancies in the workplace, with 72 per cent of employees fearing that it will be difficult to find alternative employment.

At a time of mass redundancies, knowing your employment rights is more important than ever. Outlined below is an overview of some of the key legal issues in a redundancy situation.

What is redundancy? Redundancy is when a job or a substantial part of a job is no longer needed by an employer. This can happen for different reasons, perhaps because of changes in the way work is done, restructuring of the workforce or reduced demand. Once the possible need for redundancies has been identified, the employer must follow a fair redundancy procedure.

Consultation and selection – consultation is one of the key ingredients of a fair redundancy exercise. It should be meaningful with a view to avoiding or reducing the number of employees affected by redundancies and not just a tick-box exercise. Best practice requires consultation in all redundancy cases, and a dismissal for redundancy without consultation could be unlawful.

Except where the proposal is to dismiss persons in Crown employment, if an employer intends to make more than 20 people redundant, there is a legal obligation for them to consult the workforce. The minimum consultation period in those cases is 30 days which increases to 90 days if 100 or more workers are being made redundant. If there is a recognised union in the workplace it must be consulted. In the absence of a recognised union, the employer should establish staff representatives to consult with. There is no legal requirement to take these steps in relation to persons in Crown employment, although where such proposals impact on persons in Crown employment, there are usually redundancy consultation agreements in place with the recognised trade unions.
One issue to be considered carefully during the consultation process is the reason for selection for redundancy. Employers need to have in place clear objective selection criteria. Employers cannot use criteria which discriminate on one of the unlawful grounds. There is a danger that employers could take advantage of the difficult economic climate to disproportionately target certain employees. Even a selection criterion which is applied across the workforce and appears to be neutral can leave some employees, for example those with a disability, vulnerable in a redundancy selection exercise. It is not uncommon for employers to use criteria such as sickness absence and performance targets as a measure for their selection for redundancy. If an employee has had sickness absence with a phased return to work on reduced hours then this will clearly impact on their scores against performance measures such as productivity and profitability. In such circumstances, disabled employees should ensure that "neutral criteria" do not 'hide' disability discrimination.

Suitable alternative employment – employers are obliged to look for alternative roles for those selected for redundancy. Even jobs at a more junior or senior level should be considered.

Except in the case of Crown employees, where the terms and conditions of the alternative role differ from the employee's previous terms and conditions, there is an entitlement to a statutory trial period of four weeks (or longer if it is agreed this is necessary for retraining). The trial period allows the employer and the employee time to test the suitability of the role for the employee. If at the end of that period, the employee reasonably decides that the role is not suitable, then they are treated as if dismissed for redundancy. If they remain in the role after the trial period, or if they unreasonably refuse a role which was suitable for them, then they lose their right to a redundancy payment.

Redundancy pay – entitlements to redundancy pay are determined by the terms and conditions applicable, which will vary. In the civil service, redundancy entitlements are determined by the Civil Service Compensation Scheme. In other parts of the public sector, terms and conditions of employment as well as local policies and agreements will set out entitlements to pay on redundancy. In most cases, tax is not payable on the first £30,000 of redundancy payments.

Unfair dismissal and compromise agreements – employees with at least a year's service may have a potential claim for unfair dismissal if a redundancy dismissal is not handled fairly. In the civil service there is also an appeal to the Civil Service Appeal Board. Unfair dismissal claims are brought in the employment tribunal, and must be brought within three months less one day of the date of termination of employment. Failure to carry out statutory consultation gives rise to a separate claim.

Sometimes the potential for a tribunal claim can be used as leverage to negotiate an enhanced redundancy payment. Most employers offering enhanced terms in these circumstances will insist on recording the arrangements in a formal legal document called a compromise agreement. Employees should seek advice from their union or legal advice if they are not a union member.

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