Cheshire East Redundancy Info - Scope

Scope

This procedure applies to all employees of Cheshire East Borough Council.  It is not applicable to schools based employees.  There are specific procedures for schools employees which can be accessed via the Schools Intranet Site

Definition of Redundancy

This procedure will apply where there is a redundancy situation as defined by the Employment Rights Act 1996:

    Where business has ceased or diminished
    Where the requirements for work of a particular kind has ceased or diminished
    Where there has been a significant change in the place of employment and there is no suitable alternative employment available

A redundancy payment can only be made where the statutory definition of a redundancy is met.  It cannot be paid in any other circumstances.

Procedure

Where the possibility of redundancies arises, management will enter into consultations with the appropriate employees and employee representatives as early as possible and with a view to discussing of all the options. See also Restructuring Policy.
An Equality Impact Assessment should also be carried out to ensure that the proposals do not adversely impact on any of the disadvantaged groups.
Consideration will be given to the following criteria, in order to avoid early redundancies, subject to the Council’s business needs at the time.
    Normal employee turnover and retirements
    Recruitment freeze or the use of temporary or fixed term contracts or other short term methods of covering the work, e.g. acting up arrangements.
    Ring fencing vacancies to affected employees
    Partnerships with other local authorities/organizations to advertise their vacancies to Council employees prior to external advertising
    Reducing costs by reducing overtime; reviewing the balance of gradings (using job evaluation as appropriate); reviewing working patterns (to avoid those that attract enhancements); reviewing terms of employment
    Buy out of hours, considering whether employees would be willing to reduce their hours
    Retraining/Reskilling for employees to enable them to develop new skills and so move on either within or outside the Council
    Outplacement and counseling services which may assist employees in finding employment outside of the Council
    Protection of earnings where there is a reasonable alternative job at a lower level.  Salary protection could avoid the need for redundancy/severance and could be a less costly option.
    Redeployment should be considered across services and departments.  It is vital to its success that managers take a positive approach to this and that appropriate help and support is given to the employee, see Redeployment Policy.
    These options should not be seen in isolation but as part of a total approach.  It will rarely be possible to use one option without another.

Compulsory Redundancies

At the end of the consultation period where none of the above considerations have provided a solution to the redundancy situation, affected employees will
be issued with a notice of dismissal on grounds of compulsory redundancy.

Consultation

It is a legal requirement to consult both employees and appropriate representatives about potential redundancies. Consultation should include discussion on ways of:-
    Avoiding dismissals
    Reducing the number of employees to be dismissed
    Mitigating the consequences of the dismissals
    Selection Criteria

with a view to reaching agreement.

Where the Council is considering reductions in staffing levels it will seek the views of relevant recognised trade unions and employees.

At any time during the consultation period, the proposals may be withdrawn or modified in response to changes in circumstances or the identification of an alternative course of action.

Consultation will take place at the earliest opportunity even when the employees to be made redundant are volunteers, and irrespective of whether or not they are members of the recognised trade union, or whether they qualify for redundancy pay.

Failure to consult could result in financial compensation being awarded to redundant employees by an Employment Tribunal.

Consultation for all redundancies will take place at the earliest opportunity but where:-

i) 20 or more redundancies are proposed at one establishment (ie Cheshire East Borough Council) within a 90 day period consultation will begin at least 30 days before the first dismissals take effect.
ii) 100 or more redundancies are proposed at one establishment within a 90 day period, consultation will begin at least 45 days before the first dismissals take effect.

Timescales for proposed redundancies of less than 20 will be part of the consultation but the process will be the same.

Discussions with the Trade Unions will include:

a) The reasons for the proposals;
b) The number and job titles of those potentially affected
c) The total number of employees of that job title employed at the establishment
     in question;
d) The proposed method of selecting the employees who may be dismissed;
e) The proposed method of carrying out the dismissals

Notification to Secretary of State
Employers who are proposing to dismiss employees as redundant have a duty to notify the Secretary of State in respect of redundancies involving at least 20 employees. This notification must be made within the same timescales as those laid down for consultation with appropriate representatives. Failure to comply with this requirement is a criminal offence. Therefore, it is essential that the Head of HR and OD is advised of all consultations.

A copy of this formal notification should be sent to the Trade Unions.




Consultation with Employees

Consultation with employees will take place at two levels: collectively and individually. Precisely what is notified to employees and exactly how it is done will vary according to particular circumstances but in broad terms it is usual to follow a collective meeting with individual discussions. It is recommended that a representative of the Human Resources Team be invited to both meetings. Trade Union representatives should also be invited to attend these collective meetings.


Collective Consultation

A collective meeting is useful for giving information to groups of employees on:-
* The financial backgrounds to the need for redundancies.
* The alternatives that management have considered.
* The numbers and categories of employees likely to be affected.
* The criteria to be used in selecting employees for redundancy.
* When individuals will be informed of their position.
* The opportunity for individual discussions.
* The content and availability of assistance and support
* Cheshire East Council’s redeployment procedure.

Employees should be invited to comment on the proposals within an agreed timescale. Further meetings may need to be arranged as a result.

Individual Consultation

Employees affected will be offered an individual consultative meeting with their manager and the Redeployment Officer to discuss the details of the process. Employees may be accompanied at this meeting by a Trade Union representative or a work colleague.

Individual counselling through the Occupational Health Unit will be provided where appropriate and necessary.

Selection Criteria for Redundancy

The selection criteria to be used will be notified as part of the consultation for any particular proposed reduction.

Voluntary Redundancy

In conjunction with the above measures, Cheshire East Council will consider volunteers for redundancy either directly or indirectly but volunteers will not automatically be accepted. (Indirect or ‘bumped’ redundancy is where a volunteer in a continuing job is dismissed to make way for another employee who would otherwise be redundant). In such circumstances the volunteer’s employment is terminated on grounds of redundancy.

When considering applications for voluntary redundancy the Council will consider:

•    The need for the competency and skill set to meet the current commitments
•    The uniqueness of that competency and skill set in the organisation to the expected demand
•    The likely need for that competency and skill set to meet future needs
•    The likely timescale of future needs, comparing the cost of retention with the cost of VR and future re-recruitment
•    The opportunity to cross skill or retrain remaining staff to fill the gap, and the cost and timescale to achieve this
•    The cost of VR


Termination of Employment

The termination of employment on the grounds of redundancy requires formal cabinet approval.

Appeals
If an employee wishes to exercise his right of appeal against the termination of employment on the grounds of redundancy he/she must do so by lodging a notice of the grounds of appeal in writing to the Head of Service and copied to the Head of HR & OD within ten working days of being notified of the action.

The written notice of appeal must clearly state the grounds for the appeal.

All appeals will be heard within 20 working days of the receipt of the appeal being received.
The employee and his/her representative will be given notice in writing at least five working days in advance of the time and place of the hearing.

Any extension on the timeframes must be agreed in advance by both parties.

The Appeals Panel consists of a nominated representative who has not had prior involvement with the case, advised by a representative from Human Resources. At the appeal hearing both parties (i.e. the individual who is appealing against the action taken against them and the officer who is presenting the management’s case) have the opportunity to state their case and to ask questions of each other. The employee may be accompanied to the appeal hearing by a work colleague, or a union representative. Once they have heard the case the panel may make the following range of decisions.
The nominated representative hearing an appeal against the action taken / decision to dismiss the employee may allow the appeal, or dismiss the appeal.
The Appeals Panel has power in the case of an appeal against action that includes dismissal to:
    dismiss the appeal; or

    to allow the appeal;

There is no further right of internal appeal against the decision of the Appeals Panel.

Employees may be accompanied at formal hearings and appeals by a trade union representative or a work colleague.

If unsuccessful at appeal and subject to one year’s service, the employee may then appeal to an Employment Tribunal claiming unfair dismissal.

Period of notice

Where the employer gives notice of the termination of employment notice will be as follows:                                                                                                                         

Length of continuous employment    Period of notice
Less than 4 weeks                No entitlement to notice
Four weeks but less than two years    1 week
Two years but less than 12 years    1 week for each year of continuous employment
12 years or more    Not less than twelve weeks


Previous service with any public authority to which the Redundancy Payment Modification Order applies will count towards the length of service for notice periods (provided that all service has been continuous).
In Compulsory Redundancy situations (only) where Cheshire East Council is unable to serve the appropriate period of notice by the date on which employment ceases, advice should be sought from Human Resources regarding the discretion to apply pay in lieu of notice.

Annual leave

Where employees have been given notice of termination on the grounds of redundancy, managers should try to ensure that they use up any outstanding leave entitlement, accrued up to the end of their employment. In cases of voluntary severance, any unused leave entitlement at the date of termination will be lost and this will be reflected within the settlement agreement.

In a compulsory redundancy situation (only), where an employee is not able to take outstanding leave due to work pressures, they may be entitled to a payment in lieu, in accordance with the provisions of the Working Time Regulations. In such situations managers must seek advice from Human Resources.



Letters of Dismissal

Notification of redundancy dismissal should be in writing and should include notice periods, details of the redundancy payments and pension’s benefits payable where there is an entitlement and notification of the employee’s right of appeal with details of how the employee may exercise this right if he/she wishes.

Leaving Early

If an employee resigns in anticipation of being selected for redundancy s/he will have no entitlement to a redundancy payment.

Alternative Employment

If an employee who has been served notice of the termination of employment on the grounds of redundancy, but before the date on which their notice expires, is offered suitable alternative employment, either by Cheshire East Council or with a public authority within the Redundancy Payment Modification Order to start within four weeks of the expiry of the notice, s/he will have no entitlement to a redundancy payment.
If, however, employees are offered employment by an employer which is not within the Redundancy Payment Modification Order s/he will remain entitled to receive the redundancy payment from Cheshire East Council.

Re-engagement

Where employees are compulsorily dismissed on redundancy grounds they may be considered for re-employment to posts within Cheshire East Council after the minimum statutory period of four weeks’ absence has elapsed, subject to the following conditions:-
•    The vacancy did not exist or was not foreseeable at the time of the dismissal. The vacancy has been advertised in accordance with Cheshire East Council policy and procedures.

•    The appointment has been made on the basis of the best person for the job with regard to the usual selection procedures.

The re-employment of any former employees who have left the employment of the Council or Legacy Councils on the grounds of voluntary redundancy/severance will be subject to the agreement of the Head of Human Resources/Organisational Development in conjunction with the Leader and the relevant Portfolio Holder, and will only be on the grounds of truly exceptional circumstances. Reappointment and re-engagement includes all types of contractual relationships whether they be a contract of employment, contract of service, etc and whether the individual is appointed as an employee or engaged as an interim, direct consultancy or via an agency or other supplier.

This re-engagement policy will be reviewed in 3 years time by the relevant cabinet member.


Redundancy Payments

In a redundancy situation, as defined by the Employment Rights Act 1996 an employee may be eligible for either early retirement or severance, depending on the circumstances. 

For employees in the Local Government Pension Scheme, the provisions are:

Compulsory Redundancies
-    early release of pension benefits  (if aged 55 and over with at least three months membership in the LGPS or with transferred pension,
-    the payment of the pension lump sum (if aged 55 with at least three months membership in the LGPS or with transferred pension)
-    a redundancy payment in accordance with the State formula (see chart A) based on the employee’s actual week’s pay.


For Voluntary Redundancies/Severance only
-    an additional severance payment of 0.8 times the statutory payment, bringing the total payment to 1.80 times the statutory formula and up to a maximum of 50 weeks pay This additional element is awarded in accordance with the Local Government (Early Termination of Employment) (Discretionary Compensation) Regulations 2000 and the Council reserves the right to change all discretionary elements.

The employee may request the Council to use this additional payment to augment their pensionable membership. This is subject to a maximum enhancement of not more than 10 years.

NOTE: 
-    the statutory redundancy payment cannot be used to purchase pensionable service
-    the full additional severance payment has to be used, it cannot be split (therefore if the maximum augmentation would be exceeded, this option is not available).

Employees who are not in the LGPS will be entitled to:

Compulsory Redundancy - a redundancy payment in accordance with the State formula based on the employee’s actual week’s pay.

-    Voluntary Redundancy - a redundancy payment in accordance with the State formula based on the employee’s actual week’s pay plus an additional severance payment of 0.8 times the statutory payment, bringing the total payment to 1.80 times the statutory formula and up to a maximum of 50 weeks pay.  This additional element is awarded in accordance with the Local Government (Early Termination of Employment) (Discretionary Compensation) Regulations 2000 and the Council reserves the right to change all discretionary elements.

Salary Sacrifice Schemes

Where an employee is participating in Salary Sacrifice schemes, e.g. Green Car Scheme/Purchase of Annual Leave etc, at the time of redundancy their redundancy payment will be calculated using the pre sacrificed salary.

Cost to the Employer

The employing department bears the cost of an employee’s redundancy payment together with the capital cost to the pension fund of early payment of pension and augmentation.

Time off for Job Hunting

An employee who has been given notice of dismissal on the grounds of redundancy is entitled, during the period of notice, to reasonable time off with pay to look for other employment or to arrange training for future employment.
Employees should always check with their manager that it is convenient for them to take time off to look for work, visit the Job Centre or attend an interview, before they arrange or confirm an appointment.

Equality

Cheshire East Council will ensure that, when implementing the Redundancy Procedure, no employee will be disadvantaged on the basis of their gender or transgender, marital status  or civil partnership, racial group, religion or belief, sexual orientation, age, disability,  pregnancy or maternity, social or economic status or caring responsibility.  This means that the Procedure may need to be adjusted to cater for the specific needs of an individual including the provision of information in alternative formats where necessary. 

Monitoring

Data relating to Redundancies will be collated and monitored regularly to ensure that the Procedure is operating fairly, consistently and effectively.  Issues that are identified from the data will be dealt with appropriately.
Review
This procedure will be reviewed in the light of operating experience and/or changes in legislation.