Pitfalls of a Redundancy Process – Fair and non-discriminatory selection during Covid 19Posted in : Webinar Recordings on 15 July 2020
A sad but inevitable outcome of the Covid-19 pandemic is the downturn in many industries resulting in significant cost cutting exercises.
In this webinar recording, Scott Alexander (Legal Island) will discuss some of the pitfalls in redundancy selection with our panel of experts from CC Solicitors (a specialist employment law practice), Colleen Cleary (Founder and principal), Claire Dawson (Partner) and Regan O’Driscoll (Partner), with particular focus on how to avoid discrimination in the selection process.
This webinar recording looks at:
- Cost reduction measures to reduce numbers of compulsory redundancies.
- Top tips in how to implement a fair redundancy process
- Discrimination arising in the context of Covid-19 – gender, family, age and disability
- Vulnerable employees
- Key considerations in drafting non-discriminatory selection criteria.
Scott: Good morning. Welcome everybody. My name is Scott Alexander. I'm from Legal-Island. Welcome to this webinar on the "Pitfalls of Redundancy Process - Fair and non-discriminatory selection during COVID-19". It's in association with CC Solicitors, who are a specialist partnership and employment law firm.
And you can see the three partners in front of you there. We have Colleen Cleary, Claire Dawson, Regan O'Driscoll. There's me at the end. I'm not with CC Solicitors. I'm with Legal-Island. Then you have the contact details and you will receive them all at the end as well.
We are going to be looking at redundancies today. But just before we do, if we click on to the next slide, Arnold. There we go. We have a number of eLearning courses, which may be useful at the moment, particularly the one that's selling like hotcakes for Legal-Island at the moment, which is the Return to Work Safely Protocol. And if you want to know anything about that, you can get in contact with Debbie in Legal-Island, and we will be in touch with that.
Okay. So we're going to be dealing with redundancies. We're going to be focussing on a number of issues and trying to make them fair. But first of all, Colleen, maybe set a little bit of the background, and why are we chatting about redundancies at this particular time.
Redundancies Arising During Covid-19 Pandemic
Colleen: Well, I suppose it's pretty obvious why we are talking about redundancies at this particular point in time, Scott. The end of August, I think, for a lot of my business clients has always been a bit of a predicted crunch time. That's when the temporary wage subsidy is going to come to an end. It's also probably the point when a number of people are going to consider the Deferred Tax, VAT, and PAYE that they've been putting off. A number of key decisions will have to be taken in relation to that. So we are kind of coming out with a bit of a protective bubble.
The last number of months, we've kind of been looking with our clients the number of redundancies probably more to the senior level, but I think that's going to trickle down now, that people are going to take some very significant decisions.
And if you think of the news today and the fact that the quarantine is not going to be . . . well, the consideration that the quarantine may not be lifted, the pubs may not open, it could impact confidence in the economy, and people are going to have to take some very significant and serious decisions about their business. And in that context, that's why I think we are talking about redundancies, but we'll have to come out of the bubble and take some decisions.
And there was a lot of talk in the midst of pandemic around layoff and the fact that there were some changes around that, the fact that the layoff . . . that somebody couldn't trigger or activate the right redundancy payment. But essentially, and this is really important, the whole law around redundancy hasn't changed. It's pretty much remained the same and the protections are still there for employees. So that's a very important point to understand, I think, at the beginning of this session.
Definition of Redundancy
Scott: Okay. Claire, again, putting it in context, what is a redundancy in law?
Claire: Well, I think the important thing to remember is that redundancy is a termination or dismissal of an employee for objective business-related reasons. And it's very important for the employer to be able to establish that a dismissal is in fact on the basis of a genuine redundancy situation, and then that the redundancy has been carried out fairly.
The burden of proof will be on the employer when they are dismissing any individual or group of individuals to establish that that dismissal was fair. And if they're relying on redundancy as a reason, then they have to be able to point to the fact that the situation and the need for employees to do particular roles or functions has reduced.
Now, in law, there are five particular reasons in the legislation for redundancy situations. So, if there's a business shut down, so that's where a business is closing completely, or if it's shutting down in a particular location, or if the business requires fewer employees to do work of a particular kind, or no employees to do work for particular kind.
Another reason might be that they're going to carry on doing the same amount of work with fewer employees or that there has been a downturn in work. And sometimes, one of the reasons that can be relied upon is that the work is going to be done in a different way, and the employee or particular employees are not sufficiently trained or qualified to do it that way.
And the final fifth reason that can be relied upon is that they need the employee to be able to do other work as well as the current work that they're doing, and the person who's doing it is not sufficiently trained to do that work.
But the main reason that we see for redundancies is that an employer has decided to do work in a different way, and that requires fewer employees, or I think, sadly, at the moment, that there's been a general downturn in work and fewer employees are required. And that's why we come to the issue of selection, because there are still going to be employees working in the business, but fewer are required, and therefore, how do we select them fairly for redundancy?
Scott: I suppose a lot of that impacts now with COVID. Even if you take Legal-Island, all our in-person events were cancelled as of March. We're running an online one next week. You've been doing podcasts. We'll send people details of the podcasts afterward. So people are doing things differently and you need new skills, but at the same time, there's been a huge collapse in demand for various things and, therefore, there's less requirement for people.
Key Features of a Redundancy Process
So what are the key features then? If you're looking at redundancy, you've got the reasons, you've established there are five particular areas that you can look at, what are the key features there, Claire?
Claire: Well, I think it's really important that the case law has told us that there are two key features that characterise the redundancy situation. Impersonality is one of them, i.e. it's not related to a particular individual, but rather a function or role that's going, and also change. So those two features need to be there, impersonality and change.
So the change could be that the business is closing in a particular location, but it could also be that work is going to be done in a different way. And as I think I said, the most common redundancy situations that we advise upon are where there's less work to do and therefore fewer employees required to do it, or the employer has decided to do the work in a different way, meaning fewer employees are required. So, often, there's a reorganisation or a restructure of the way that the work is being done.
Scott: Okay. If you're just joining us, folks, you're listening to a broadcast here on redundancies and within the COVID situation. We're here with three partners from CC Solicitors, who specialise in employment law and partnership law.
The one that we haven't heard from so far is Regan O'Driscoll. So, Regan, what are the main features of a fair termination? Because the whole point is you can fairly dismiss somebody by reason of redundancy. So what are the key features?
Regan: That's correct. You can do it fairly by reason of redundancy, but there are kind of two legs to it. I mean, there are probably two legs to most terminations. You've got to have the basis for it and then you've got to have the procedure.
So, here, you firstly have to establish that there is a redundancy and being mindful of the various criteria that Claire has said in terms of what is a redundancy. Once you've established that, then you have to consult with the person and actually meaningfully consult them in terms of how you avoid the redundancy. And that could mean any number of things in terms of whether the role really needs to go or whether there's somewhere else for them to go within your organisation.
Now, in reality, I think most of your attendees are going to know that there's very little chance in practice. I mean, from what we've seen of an alternative being found or have some way of saving the role in situations like we're facing now where there's going to be severe economic pressures on employers, you're still expected . . .
I think what came out of the last recession was that the WRC, CE, or the EAT, as well, we're very clear that that obligation is still there and that you're meant to fairly consult with the person because this is a very significant change in their lives where they're going to lose their employment. And that can involve a few meetings with them and really discussing with them what you're intending to do before you make a final decision.
And the reason why this is so important is because if you fall down on that leg, despite the fact that you might have actually established the reason for the redundancy, and again, many of your attendees will know this, is that you could be facing an unfair dismissal claim. The penalties for that are very severe potentially of up to two years' gross remuneration. It is limited to actual loss, so it's capped, essentially, where somebody gets another job quite shortly afterwards.
But again, we're facing into potentially a very severe economic climate going forward, and people might not be able to get other jobs. So by the time this comes up for hearing if you have an unfair dismissal claim, which could be a year down the line because of the delays of the WRC are experiencing right now, somebody who manages to establish that they've been unfairly dismissed could get a year's salary potentially at that point.
So these are all very important factors to keep in mind before you enter into the process of termination.
Scott: Okay. And I suppose at this time of year it's unlikely it's just going to be the one person being made redundant. It could be several.
So what do we mean though by standalone? What's a standalone position?
Regan: Well, a standalone position is one where you've got one person in one role, and there's nobody else who can do that role of essentially, or there aren't a number of people doing essentially the same job or something very similar to it. So the classic example would be your managing director or maybe your COO or something like that. The higher you go up the food chain in an organisation, the more likely it is, really, that somebody's going to be in a standalone position. If you're a sales organisation, the likelihood is you're going to have a certain amount of salespeople at a certain level, and then a certain amount of managers over that, but there'll be fewer, and then so on and so forth.
So, when you have somebody who's in one position, in some ways it's kind of easier to terminate because you don't have selection issues arising. Strictly speaking, you do have to be careful to look around to make sure and really look at the roles at random to make sure it is truly a standalone position.
But on the other hand, and again, many of your attendees will know this, in the ordinary course sometimes terminating somebody in a standalone position can be risky because it does look as though they're being targeted.
Now, I don't really see that being much of an issue if we're facing into the kind of situation where we seem to be, because I think redundancies are going to be common, and it won't look very much like people are being targeted even in a standalone position. And the main thing is, I suppose, from an employer's perspective, you are avoiding that issue of having to consider who else is in that pool with that person. The reality is nobody else is in that pool.
Scott: Okay. So we're going to come on to that just in a second. We'll come back to Colleen. Some of you have already worked out that there is a question box there, and I can see them piling in at the minute. We'll get around to them once we've had a further discussion.
Fair Selection in Redundancy Situations
So you're listening to CC Solicitors here and we're talking about redundancy and fair selection and all of that. So effectively, if we go back to Colleen here, what do we mean by fair selection? Presumably not a standalone. You're looking at the pool, who's in the pool, all that kind of thing.
Colleen: Yeah, and I suppose just following from what Regan said there, many of the redundancies that we've been looking at the moment are at a senior level. Typically at a senior level, they are at standalone. And the reason for all the caution, as Regan sort of articulated, is that once an individual has a year service, they have that protection under the Unfair Dismissal Act not to be unfairly terminated.
Regan spoke there about the two limbs. That's always really important. What are the reasons? What's the process? And because of what Claire was talking about, the fact that we have this economic situation that we're in, it's probably going to be quite easy to kind of establish the reason, establish the downturn because of the economic climate.
The procedure is going to be the tricky piece. Like we said, as we alluded to, standalone can be a little bit easier because it's a standalone position. We tend to advise around with a more senior side of that, with a senior executive, that could be particular other issues that the client might need advice on.
But in terms of the actual procedure and process, that can be very tricky too. And that's where the potential redundancy applies to more than one person.
So what do we mean by fair selection? We mean an objective criterion, because as Claire also said, it's all . . . if you keep in your head doing a redundancy process, it's about the impersonality. It's the function, not the person that's redundant. So, therefore, the selection process must be objective. It mustn't relate to the person themselves performing the job. It has to have some kind of criteria that, from the outside perspective, can seem objective.
A lot of clients will say to us, "Well, do you have a matrix you can just send us criteria? We need something . . . we need to make selections". And that really is a bit of a no-no, because you've got to sort of look at the needs of your business first. That would always be my first . . . any kind of initial meeting that I have with my clients about the business, I'd say, "What do you need? What are the needs of the business?" And then we can come up with the criteria.
The other tip I would have around that would be to keep the criteria nice, and neat, and small, maybe two or three, no more than that.
And the other thing that we're going to come on to in our slide in a moment is that a criteria might seem objective initially, but actually, when you dig down deep into it, it's not. So that's why you've got to have that really good discussion at the beginning. What do you need? What's objective? What does your business look like? How can you justify the objective criteria? What are the needs of your business?
And the other thing I would say as well as is that there are always red flags. The red flags for us always, and where we might get involved in a bit of advice, it's pretty predictable. It's always around maternity leave, someone who's been on maternity leave, someone who's pregnant, someone's on long-term sick leave, somebody who's nearing retirement age. They are classic, and they are really are your red alerts. You've just got to be aware of those. And someone who perhaps is under some sort of final written warning or whatever. These are all considerations that just make you tread a little bit more carefully.
So we're going to talk specifically then a little bit maybe on the next slide, Arnold, about the different types of criteria, which on the face of it might seem objective, but if you kind of dig down deep into it after you've had your business discussion, "What does my business need? What does the business require going forward? What criteria can we use?"
And just for example, a very straightforward one, last in, first out. Classic selection criteria. Was very popular, and still is fairly popular. It's a bit of a rule of thumb. But the bottom line is that the criteria cannot discriminate. And when we say discriminate, we mean it can't be for a discriminatory reason, as I think we're all aware.
Again, we're assuming a level of knowledge here. With our panellists, I'm sure you're aware there are nine grounds of discrimination under the Employment Equality Acts. And the last in, first out criteria can potentially discriminate against younger workers because it's arguable that they may have less service than older workers.
Now, I suppose that's taking quite an old-fashioned view of workplaces. Workplaces are quite different, and where that may have been the case, say, 20 years ago, people do jump around a lot more. So it may not be the case in your organisation that the last in, first out criteria discriminates against young people. It probably discriminates more perhaps in the public sector environment, where people older would have longer service, where it's probably less likely to be redundancies than there would be in the private sector.
So that's just something to be aware of. Discuss last in, first out. Is that suitable for your business? Will it discriminate? It's a bit of a rule of thumb that in the absence of all criteria you could potentially use. And then another criteria . . .
Scott: I was going to say, similarly when it comes to last in, first out, it's sometimes about the only thing that people have left because they haven't analysed anybody else. They don't have proper appraisals, and they don't look at outputs. You're working in services and it's not based on sales. It's based on you just work in an office and how do you tell one from another?
I think one of the problems is that if you don't analyse things, or if you haven't in the past told people you will use things like absence level, that we'll come on to in a minute, and sick leave and stuff, if you haven't told them you're going to use those for redundancy selection, the chances are you're probably left with whenever you started.
Cost as a Criterion in Redundancy Selection
But that leads into the second point, which is cost, because if you get rid of the ones who have been there with less service, they cost you less. And maybe that's why they do it. They're more experienced and they cost less, and you think you're going to be loyal to your existing staff members.
But it often boils down to, in my experience, it's about the only criterion that's left for employers because they just haven't gathered the evidence. They haven't thought ahead that there will be redundancies and what's left to be objective other than LIFO is maybe one of the problems that we have.
Colleen: Yeah, I agree, Scott. I mean, it's a potential fall-back, but it may not be right for your business. So it might just be worth thinking a little bit deeply at the beginning of the process if that's right for your business or not.
Every business is different. There's no one size fits all. Don't just get criteria off a website. Think about it, because with a little bit of thinking, you can work out a process.
And let's remember terminating someone for misconduct or capability is really difficult and it takes a long . . . when someone's got a year's service, that's a significant process, and procedure, and commitment for time. If you terminate somebody on the grounds of redundancy, if you do it properly, it's much more straightforward. I mean, obviously, nobody wants to lose a job and there are consequences for that. But the time that would take to run a redundancy process and procedure fairly and properly is minimal compared to the time it would take for any other kind of type of termination.
So it's worth getting it right at the beginning because your process and your procedure is something that will stand to you in the event of a challenge, because there will be challenges. There's no doubt about it, like we saw in the last recession.
Just dealing with the other point that you mentioned around cost, what do we mean by cost? In the context of cost there, one view could be the cost of your employees. The older employees may be more expensive than the younger employees. Again, cost in itself is also a potentially an objective criteria. It's not actually used that often, but it is objective. It doesn't relate to the individual insofar as their particular performance. But it could also, again, discriminate against older workers because older workers are going to potentially be the more expensive employees.
So again, just to keep that in mind, that what something . . . I suppose we're trying to demonstrate that something on the surface might seem objective, but it could not be objective and it might not work for your particular organisation.
Scott: I think, Claire, you mentioned about people doing things differently, and that might be tied into something that Colleen was saying there, that if you want the right people survive going forward in the new normal, whatever that is, it may not be that the longest serving members of staff, like me, are the ones that you want to keep on. It might be the ones with different skills. So that ties in, again, with what Clemson, which is you really ought to be analysing, "What do I need to survive here? What do I need to grow? What do I need to move forward?"
Performance as a Criterion in Redundancy Selection
But what about things like performance and flexibility and looking at those as objectives criteria?
Claire: Yeah, I think relative performance appears on the face of it to be really objective if you're able to look at . . . and it is objective in the sense that it's not just a subjective measure of somebody if you're looking at numbers. So do your staff have clearly measurable targets, KPIs? Do they have a specific sales or revenue target? Are individuals required to generate a certain amount of new business or clients? Are they required to deal with a certain number of files? There are lots of numeric targets that staff have.
And if you look at those, they're objective. They can't be distorted. They're not just based on somebody's impression of an individual. So they are objective in that sense. But unfortunately, they're not completely unproblematic either from an employment law point of view.
For example, if you're looking at a period of 12 months, and you're looking at all your staff's performance over a period of 12 months, when you come to do the selection for redundancy, you have to be really careful that you're not unwittingly targeting anyone who's been on maternity leave for 6 of the last 12 months, for example, or who had just returned from maternity leave and might have been ramping back up again. You have to be careful that you're not targeting anyone who's had a disability-related sickness absence recently.
I think it's really important in that context, particularly now when we're post-COVID lockdown, to make sure that if you're looking at a particular period of performance, you're not taking into account or you're not unfairly discriminating against, for example, women who may have taken the lion's share of the childcare and homeschooling responsibilities, and may have reduced their hours, and therefore, naturally performance against target may have reduced for those individuals.
So there's potential there for gender discrimination. There's potential for family status discrimination. Again, if you're looking back over this COVID lockdown period, anyone who's a parent, whether that's a man or a woman, may have had to take on additional responsibilities, may have had to reduce their hours, and that could affect their performance on sort of objective measures.
So I think while performance does offer a good way of scoring individuals on a selection matrix, you do have to be careful about how you're applying it and looking at the circumstances of the different individuals.
Pregnancy and Redundancy
Now, one of the questions that we get asked a lot is about the situation with pregnant employees and employees on maternity leave, and whether they can be made redundant. Now the situation with pregnant women is that they are not automatically ring-fenced from being made redundant. But, of course, if you dismiss somebody who's pregnant for a reason related to their pregnancy, then that can give rise to a claim for automatic unfair dismissal and discrimination, and no length of service is required for that claim to be brought.
Now, the European Court of Justice has confirmed that as a matter of EU law, an employer may dismiss pregnant women as part of a collective redundancy if national law allows for that. Irish law doesn't specifically prohibit dismissing a pregnant woman if there's a rationale that is not related to the pregnancy. However, we know that it's very difficult for an employer to show that the pregnancy has had no impact on their decision.
There's a WRC case from last year actually where quite a senior individual who was five months pregnant was selected for redundancy in the context of 15 other employees being made redundant in Ireland, and a wide redundancy exercise happening worldwide in a large multinational company.
And there appeared to be a rationale for the redundancy for business-related reasons, but actually the adjudicator looked at it and said, "No, this is a pregnancy-related dismissal. It's discriminatory", and that woman was awarded €55,000 in compensation.
So it is difficult for an employer . . . and rightly so because pregnant women are in a vulnerable category when their maternity leave is impending and an employer is looking at as who they need in the business going forward. It's difficult for an employer to justify a dismissal in those circumstances. And so many employers choose to ring-fence pregnant employees from the redundancy process. And that is lawful because we know that employers are allowed to give more favourable treatment to pregnant employees to protect them.
The other question, of course, relates to women who are on maternity leave. And as a matter of law under the Maternity Protection Act, women who are on maternity leave cannot be dismissed for any reason, including redundancy. And so the dismissal, if an employer tries to effect it while they're on maternity leave, is void and their period of employment extends to the end of their protected period, their maternity leave. And so employers will often wait until an employee returns from maternity leave before commencing any redundancy process.
Now, a question that we get asked a lot and I think it's just relevant to mention it here while we're on the subject is whether employers should consult with women who are on maternity leave when a redundancy process starts, even if they're not going to be made redundant, potentially, until they return to work.
And we would always say it's obviously subject to what the employee tells you. If the employee does not want to be communicated with or consulted with while on maternity leave, then an employer shouldn't do it and should wait. But if an employee is happy to engage, then it's a good idea to at least provide that individual with information about what's happening, but to confirm that no decision will be made in relation to her employment until she returns from maternity leave.
That means there's no sense that anything is being hidden from her, and it means that if there are alternative roles, for example, that she could apply for while she's on maternity leave, she's able to do so, rather than leaving it for another six months until she is due to return.
So I think pregnancy and maternity are two areas that we get asked a lot of questions about. Very relevant to how you deal with the consultation process but also very relevant to a selection process.
I think the other thing that has come up in COVID in terms of, as I said, looking at perhaps performance as a selection criteria is that we need to be careful that we're not discriminating against anyone who perhaps has had COVID and has had time off work for that reason, has been on sick leave, or anyone who has a disability and it has meant that perhaps they haven't attended work for a period of time due to that because they were in a vulnerable or high-risk category.
So employers are going to need to be very careful when they start assessing individuals against performance-related criteria, that they're not indirectly discriminating.
Scott: It seems every other week when I look at the WRC decisions there's one there about somebody being dismissed for being on maternity leave. It seems like an easy option for a lot of rather bad employers to choose.
There are other areas as well that you mentioned there, such as associated discrimination where people can't get to work because of their family status, and there are maybe no schools available and so on that would be coming in there.
Qualifications as a Criterion in Redundancy Selection
But, Regan, looking at the last couple of areas there that are on the slide, qualifications and ability to do other jobs, I suppose that's bringing people in and looking at the whole package. Again, going back to the things that we were saying to Colleen, a lot of employers don't know the qualifications of their staff. They haven't looked at the flexibility that people have. They haven't looked at their CV. They're doing one job, and they may well have other qualifications for doing other jobs, and they may have acquired them when they're at work or beforehand. They maybe haven't looked at them, but what if they're looking at things like that? What else can catch employers out or can be used to the advantage of the employer?
Regan: Yeah, I think you're right. A lot of employers don't really know their employees at all. And actually, that goes back to what I was saying earlier about consultation and meaningful consultation, because that's exactly the type of thing that should have come up when you're discussing this with your employee about the potential loss of their job. You'd be saying to them . . . I mean, one of the obvious questions you'd ask them is, "Can I see your CV? What else can you do?" in terms of whether you can redeploy them.
So, yeah, it's something that should come out in the middle of this process. It doesn't always, though, because as I've said, a lot of employers fall down on that particular leg of the redundancy journey.
The qualifications, I suppose the one thing I'd say about it is that it looks on the face of it, like many of these criteria, like one that is a criterion that is very objective. It should be unproblematic. When you're deciding who you want to keep on, you want somebody who's got whatever. A diploma in this, a Master's in this, and that should be fine. But like many of these criteria, there are, I suppose, issues that can arise, again, in the discrimination arena.
And I think it's important to point out, actually, in case there's any confusion here, we're not talking about direct discrimination. Direct discrimination is something where . . . let's say you have one criterion for redundancy and it's, "I want to get rid of all the young people". That's obviously going to be an issue. And nobody would be foolish enough to do that. I have no doubt.
But people sometimes don't think about the implications of something that is apparently neutral, where it might impact more heavily on one of the protected classes. And that's indirect discrimination. So all the things that Claire was talking about there, with performance, say, that you're just going on numbers and it has nothing to do with anyone. But actually, when you look at the effect of it, it affects people who have been on maternity leave or on long-term sick leave more.
So with qualifications, what is the potential there? It's probably unlikely, and it will depend on the sector or the business that you're in, but what about the fact that . . . You might say, and I suppose it's heavily advertised as such, that the country is a more heavily educated country than it used to be, that the younger generations have more qualifications, tend to get more degrees, diplomas, Master's, postgraduate qualifications for one reason or another. I mean, part of that is that a lot of people continued in education as a result of the last recession where they couldn't get jobs.
But leaving that aside, you might find that the older members of staff who have a lot more experience, but a lot fewer qualifications, will say, "Well, this has in effect having a disproportionate effect on people above the age of 40 or above the age of 50". So it's something to bear in mind. I do think it's probably not the most likely avenue of discrimination, but it's still a possibility.
So, as with all of these, what we're talking about and what we recommend to any client that come into us, is that you really take a good look, just like Colleen said, at what your organisation needs and then consider the impact of each of the criteria that you're considering.
So qualifications, it's a very good one. It's one of my favourites, to be honest with you. But I do think you have to be kind of slightly savvy about how you use it. The main thing to avoid any allegations of intended, I suppose, indirect discrimination is that you really think about what qualifications are actually required and don't just arbitrarily say, "I want all my employees to have a Master's in economics", or whatever it is. What do the roles actually need and what does the person need to do the job? Because if somebody can say, "Well, I happen not to have that qualification, but I have 20 years of experience and I can do the job really well", there could be some merit to that.
And then in terms of the ability to do other jobs, I think that factors into it as well. That's exactly what I just said. Think about what your organisation needs. Ability to do other jobs is probably not likely to be as problematic, although there may be an element of subjectivity to it, where somebody will say, "Well, the reason why you were saying I can't do the job is because you don't like me", or whatever. So, again, be a bit canny about it.
Take advice. I mean, at the outset of any process like this, the most successful employers, in my experience and my colleagues' experience, were the people who took advice at the beginning and got an objective view from a third party, whether that's an HR advisor or a solicitor.
The advantage of a solicitor is that any communications are going to be privileged. And in the event that any of the employees put in data access requests, you're going to be able to withhold that documentation or that data, where if this is sort of an internal email exchange, that's something you're going to hand over, and sometimes problematic exchanges can occur. Thankfully, most people are canny enough not to do this. But if you're going to have a "well, we want to get rid of her because she's going to be taking more maternity leaves" in an email, and that does happen occasionally, that's going to be an issue for you.
Scott: Okay. Thank you very much.
Colleen: Scott, just following from what Regan was saying there is that sometimes you get asked, "When was the criteria produced?" And it's quite important . . . we say to our clients in the beginning that everything really is potentially disclosable because people, if they're going to challenge a termination either for discriminatory reasons, and they don't need any service for that, or whether it's for unfair dismissal, and as we all know they need one year, they will put a data access request in.
And so everything is disclosable because it's personal data related to them, about them and their job, unless we've taken some sort of . . . unless it's privileged for legal reasons.
But I think that kind of makes people think twice and maybe makes people do a better job because you think an access request could be put in. So there's just no harm knowing that from the very beginning and knowing that documented personal data could be disclosed. Sorry, Scott.
Scott: No, it's okay. What I was going to suggest was just to see . . . I know that you've written a paper, which can go to everybody and we'll send on details how they can get that at the moment.
Colleen: And the podcast as well, yeah.
Scott: And the podcast. We'll do all the podcasts. Don't you worry. There are many podcasts. Very good podcasts they are, too. I listen to them. Why do you think you were invited here?
There are loads of questions that have been coming in, so what I was going to suggest was maybe, Colleen, if there are any other key points you want to make just now and then we could maybe go to the to the listeners' questions.
If you have any other questions, folks, send them in. There's a little questions box here. We'll read them out anonymously when we go through them, but there are a lot coming through. One or two have actually been answered by your discussion here. But I'd like to go through them here given that people have taken the time to put them in. And some of them are pretty detailed. So if there are any last few points and then we'll get on to questions. And I'm going to get my glasses if I can find them. Okay, on you go.
Attendance and Time-keeping as Criteria in Redundancy Selection
Claire: One thing, Scott, I think that comes up sometimes as well in terms of criteria is, "What about timekeeping? What about attendance records?" Again, they're really measurable and they seem really objective as criteria to include in a selection matrix.
But what I would say, again, is you've got to be careful with those because people who are parents and have young children may be more likely to have had some days away from work. Again, individuals with a disability may not have as strong an attendance record. And again, obviously, if somebody is on maternity leave, they're going to have been out for a period of time. So you need to make sure you're not factoring . . . again, you're not discriminating perhaps where there's no intention to do so against groups who are protected.
Parents are protected on the grounds of family status. Women are protected when it comes to pregnancy and maternity leave. And people with health conditions are protected by reason of their disability.
I think, again, it's not that you can't use those criteria, but you need to make sure that they're not having a discriminatory impact.
Scott: Yeah, and, of course, when it comes to discrimination, it's all to do with proportionality as well. If there was one that would have a less strong impact on it, you'd have to look at that. It becomes very complex once you move into the impact that it's going to be having.
Colleen: I just . . .
Scott: Let's go questions. Oh, sorry. Yeah?
Colleen: Sorry. I suppose just to say as well with the discrimination piece, you've got to remember . . . We spoke a lot about maternity leave discrimination because there is a lot of maternity leave discrimination in the context of redundancies and dismissals. But you've got to remember that gender discrimination is potentially unlimited compensation. You have the protection of equality from day one. And under the Unfair Dismissal, after one year, you have protection that's potentially two years' gross remuneration. But discrimination is quite different. It could be quite a substantial award.
So it's something that everybody needs to be kind of aware of. That's why we've spoken quite a lot of detail in relation to that, particularly on the gender piece where the cap is potentially unlimited.
Scott: Okay. We'll maybe start with Regan. Going back to the first question that came in here,
"If, for example, a business says that is closing now, but plans to open next year, would employees be able to apply for redundancy?"
Regan: I don't see why not, really. I'd need more detail into it. But if you're saying it's going to be closing now and it's going to be closed for the next six months, I wouldn't see any reason why people couldn't be made redundant. In effect, their job is redundant. Who knows if the business will open next year? I would imagine a degree of uncertainty about that. You're allowed to make the decision on the basis of information that's in front of you right now.
In reality, what's the alternative? You could put people on temporary layoff, but in the ordinary course, as I'm sure many of your attendees will know, a layoff is something that's only meant to be a temporary measure. And by temporary, the legislation says it's six weeks, really. So, if it's going to be a number of months, I would think, yes, it would be a redundancy situation.
Scott: Yeah, I suppose there may have been that change to the legislation...
Regan: Yeah, but who knows how long that will go on for?
Scott: Colleen, can redundancy be progressed with an employee who was being considered as at risk, but not communicated with due to going out on long-term sick absence?
Colleen: Sorry, just so I'm clear on that, so if the employee is on long-term sick absence, the question is can you make them redundant or put them at risk of redundancy? Is that what . . .
Scott: It looked like they were going to be the at-risk . . . the redundancy might kick in, but they went off on sickness instead.
Colleen: Well, that can throw up a few tricky issues. But I suppose the main issue really is that if you've started the process already and if someone is at risk . . . I think actually we had something like that before, myself and Regan, perhaps.
Regan: Yeah, quite recently.
Colleen: Yeah. Certainly, in circumstances where you've already put someone at risk from an objective perspective, that's much better. Now, how long do you keep going, whether the employee can keep pushing it out, pushing it out? There's probably a certain degree of giving them little bit of width in terms of the process. But ultimately, if the employer has a documented objective business decision and has put them at risk already, it would be within their power after ensuring that they go through kind of fair enough process and procedure to ultimately terminate, I would think, provided the decision is taken objectively on the basis of the redundancy.
I mean, obviously, it could be other things about selection there and maybe they've just been put at risk. It could be more detail around that particular question. But if it's objective, and it's fair, and the process has started, and it continues to be objective and fair and not related to his sickness or ill health, there is an ability there to terminate fairly.
But again, I think it's a red alert. I think whoever asked that question should take some advice on that.
Claire: I don't mean to jump in too much, but I just was thinking as well in that situation, it would be important, I think, as an employer to show that you've given the person every opportunity to consult, within reason.
Regan: Yeah. In writing maybe.
Claire: Yeah, you give them some breadth. You maybe extend some of the timelines you would have had for consultation. But perhaps you say, "Look, we can do . . ." I mean, as is the case now because a lot of people are working from home still, "We can do a telephone call if you don't want to attend a face-to-face consultation meeting". And depending on the nature of the ill health, it may well be that a person can participate.
But it comes back to showing that you've given the person the opportunity to participate in consultation before you take a final decision.
Scott: Okay. We're staying with you, Claire.
Colleen: I mean, if you're . . .
Scott: Oh, sorry. There was someone else coming in?
Colleen: Yeah, I suppose just to say if you're advising the employee, it's possible that the employee could probably push it out, I would think, for another couple of months. But ultimately, the decision will be made, I would think, from a business perspective. Sorry.
Scott: Okay. Well, if you're just tuning in, folks, we'll stick around for a few more minutes, if that's okay, to get through some of these questions.
Claire, what should you do if an employee requests to be made redundant?
Ties in with an earlier one. "There has been a slowdown in work but redundancy isn't something we've been considering. If that's what the employee wants, we would be willing to offer redundancy and could justify it". So I suppose it says about convenience, is it?
Claire: Well, look, the thing is sometimes employees see the writing on the wall. They see a redundancy situation is in the offing even if it hasn't been actually framed by the employer as such yet.
I think it's very important, though, in any kind of situation, particularly because of the way redundancies are handled from a tax point of view itself, etc., is for the employer to be clear that there is a redundancy situation. And then, of course, they need to look at what are their . . . as Colleen said, go through all the steps that are usual of this situation. What are the requirements of the business moving forward? How are they going to select for redundancy? And is this particular individual somebody who would be in scope for that?
So I would say to an employer in that situation, "Step back and look at what the circumstances are that apply before jumping in to doing kind of a one-off redundancy like that".
But if the role is redundant, or if there is a redundancy situation, and somebody is willing to go, then . . . I mean, in some cases, it's considered best practice to seek volunteers if you're conducting a collective redundancy exercise. It's considered best practice to seek volunteers first before making any compulsory redundancies, because then you avoid making someone redundant who doesn't want to be made redundant.
Scott: I suppose maybe this ties in, Regan, with the next question.
What are the business risks of going down the road of a compromise agreement compared to redundancy dismissal? Would you recommend compromise agreements for people that have been made redundant?
Regan: Well, yes. If you want to give somebody an ex gratia payment upon termination, then I would absolutely be getting a compromise agreement in return for that because it's a perfect situation where you can make sure somebody is waiving their rights against you. You don't have to worry for the next six months to a year that they're going to bring some sort of claim.
Do I recommend going down the route of sort of terminating and get somebody to sign an agreement rather than redundancy? Very much the depending on the circumstances.
If there is a redundancy, I think you're better off going down that road. If it's a situation where the person asking the question has somebody where they're not sure whether to go down the road of targeting or tackling performance issues, or making the role redundant, they have to decide which roads they're going to go down. But if they can go down to redundancy road, it's generally speaking less problematic. In either case, you can have a termination agreement if you're willing to pay an ex gratia amount upon termination.
There isn't really an either/or with it. I mean, you can do both. You can do both in terms of having redundancy and an agreement, but you have to decide what the basis of the termination is and then stick with that. Because if you flip flop on it, you're going to cause problems and you will end up in the WRC, in my experience.
Colleen: Just to add to that, Scott, I think framing . . . if you're trying to just have a discussion with employee around termination, if it is a redundancy, it's far better to frame it around that because that's objective reasons. And if it develops then into a conversation about an exit where there's an ex gratia paid, then you can have that conversation safely.
So, if there's a redundancy situation and it's objective, it sets the parameters for the discussion. So if it's there, I would frame it around that and then maybe then you pay an extra piece of money if it's about negotiating an exit then on top of that.
Scott: Okay. Maybe just sticking with that one there, Colleen, because there's a questions in here,
"In a standalone position, we use the criteria of cost measures". I'll open that out and say the difficulties of using different criteria for different people for different departments or different sections. Do you have to apply the same set of criteria for selection everywhere you go, even for the standalone ones?
Colleen: Well, I suppose, just to get it clear, if you have a standalone position, there isn't really criteria. When you have a standalone position, it's more about the business decision to collapse that role, which is probably going to be cost. So any roles or anything that we've been talking about and advising our clients at the moment are senior standalone positions, and it's simply the cost factor. They're collapsing the senior role in Ireland because they're taking it in-house maybe, or reorganising to a subsidiary in the UK or Germany or whatever.
So, in a standalone position, it's not really a question of selection. It is a question of costs. And that's not really a selection criteria. That's just the fact, the objective fact, the reason why you're collapsing this particular role. Selection then comes into play when there are two or more people occupying the same role.
It's a good question about do you need the same criteria for different departments? I don't think that you do. I think you can have different criteria for your salespeople, as opposed to your back-room finance people, as opposed to your manufacturing or your retail workers, as long as it's objective and fair and you explain it.
And that was the other thing that perhaps we didn't say. When you have your criteria, allow the employee to comment on them. Be transparent about it. It's like I said. Get your process right from the beginning, and it's quite easy to roll out then once you've thought about it for . . .
Because if you just run ahead with a criteria and then you think, "Actually, that doesn't really suit for sales", or, "Actually, that doesn't really suit for the retail guys or for the senior management team. And actually, we don't need any kind of criteria because in the senior management team, these are all unique, distinct roles. We're just collapsing the CFO role because we don't need that and the CEO is going to do that piece", there are little nuances that are kind of really common sense once you sit down and think about it. Just with a little bit of a shaping on the process, you'll be able to follow this quite clearly, I think, and quite objectively and fairly.
Scott: Okay. Claire, maybe we'll come back to you. There are a couple of questions here just on terms and conditions.
Are employees entitled to pay public holiday in addition to the redundancy payments and other holidays? Then calculating statutory redundancy pay, are allowances included in the calculation such as car allowance?
Claire: Well, on the statutory redundancy pay, that is based on your base salary. So that's how it's calculated, capped out at a maximum of €600 a week, and then it's based on your . . . you get two weeks per year of service and you get a bonus week. So it's based on your base salary and your length of service.
And in relation to your holidays, you're entitled to be paid out what you have accrued at the date of termination, alongside your statutory redundancy.
Scott: Okay. We've got another question here. We'll go back to Regan.
"While on temporary layoff, if looking to make staff redundant, they are receiving the wage subsidy pay. The law states that they do not accrue holiday or temporary layoff. But in this circumstance do they accrue holiday during temporary layoff?"
Regan: No, it's not something that's come up for me before, so one of the others can jump in if it has for them, but I have a feeling that's correct. You don't accrue it. I'd have to check it. But it is something that none of my clients have asked me, so I haven't looked at it in any detail, but I have a feeling that I did read that somewhere.
Colleen: Typically, working time, for you to accrue annual leave under the Working Time Act, you've got to be at your employer's disposal and working for them. So, if it's a temporary wage subsidy, it may be that you are working for them. If you're on pandemic unemployment and you're completely on proper layoff, then maybe in those circumstances it doesn't apply. We can kind of clarify that 100%, but I suspect that you have to be, under the Working Time Act, working or providing services.
Regan: The only exception for that is sick leave, of course.
Colleen: Yeah, but we can double-check that.
Scott: Okay. We'll come back on that one. Thank you very much.
Maybe a last question to you and then we'll cut this There are so many questions here we'll never get through them. But anyway, Colleen, last one for you.
Is redeployment to a lower paid job a possibility?
And I suppose that leads on to bump pay. So even with a standalone position, you're looking to get rid of somebody . . . and that's a bad way to put it, but you're looking to remove a position, and they say, "Well, hold on a second. I've got all these extra qualifications. I can do all these different jobs. I'm Scott Alexander. I've been at Legal-Island since 2006. Bump that person over there, and I'll take that lower paid job". That kind of thing, is that acceptable? Or even if it's not pushing somebody out, I'm willing to go part time or I'm willing to take a lower-grade job. What happens in that situation?
Colleen: I suppose there are a couple of issues there. The first one, specifically in relation to the question, can you redeploy somebody to a lower position, we've talked before about having the reason and then the procedure. And the procedure to terminate fairly is that you go through a selection process. You consult. You consider alternative employment. And the bottom line is redeployment to a lower paid position isn't really going to be suitable in terms of deployment. So an employee is not going to be obliged to accept that position in the event that they're given a lower paid position.
Now, in circumstances where they want to do it, like the circumstance that you've suggested there, and you talked about bumping and about moving a junior person aside because a more senior person doesn't want to be unemployed and is quite happy to take maybe 20%, 25%, 30% pay cut, that in itself would probably be an unfair dismissal of that person. To bump someone out would not be a justification because it's their job. Their role is still in existence. You couldn't just collapse that role because the most senior role was being collapsed and you're essentially being moved to the side. That's going to be probably an unfair dismissal.
Now, the reality is that people will take lower paid positions, and that's all . . . lots of things are being agreed at the moment. People are taking sort of different roles or different positions, and that's all voluntary. I think maybe what we might see as a result of all those things are some potential payment or wages act claims when things start picking up again and people want to go back to their original five days or go back to the more higher paid role that they were working.
So these things are going to come out probably a little bit later on, which I suppose isn't the subject of this discussion, but these things . . . people are moving the chessboard around just to keep things afloat, to keep people employed. But I think there will be some consequences for that.
Scott: Okay. Thank you very much. I'm going call it a halt there, if that's okay, folks. I know there's a number of questions we didn't quite get to, but we'll try and do something with them. We will collect them anyway.
You've got the wrap-up there with CC Solicitors, and you can see if you want to get a copy of their article "Redundancies, Fair Selection, and Equality Issues," and future publications, and access to the podcast. You can get in touch with . . .
Is there anything else you want to say there, Colleen, before we disappear?
Colleen: No, that's fine. If people feel there's a burning question and they want to send a question for us, we'd be happy to have a look at it. That's no problem at all. And yes, do send us an email. Happy to send out the article.
And our podcast, we have Claire Bruton and counsel who's speaking on the podcast, as well with myself, Claire, and Regan. We do regular newsletters and regular podcasts, so even if you just want to get in touch and sign up, we can just put you on our mailing list and include you.
Scott: Okay. That's brilliant. Last slide there, Arnold, please. There you go. We'll have other webinars and they're both with me, you'll be glad to know.
If you want to do a postgraduate certificate in Northern Ireland Employment Law and Practice, we run one through Ulster University. Let me get this right. Thirty-six sessions we do, including a mock tribunal with the president of tribunals and mock conciliations and mediations and all kinds of things, as well as something like 17 or 18 employment partners. So if you want to know about that, that's on the 23rd of July. It's all done remote online nowadays.
And finally, we will be launching the annual review of employment law next Friday. If you want to find out what's on the agenda, what's on the programme, it's a two-day online event, 25 November and 26 November. You can join us next week, and you will find out about that.
This webinar, you can listen back to later on. We'll send you out the link, everybody, if you've missed any of it.
Thank you very, very much to Reagan, Colleen, and Claire, all from CC Solicitors. And we'll see you soon. Thanks very much, folks. Bye.
Colleen: Thank you. Bye.
Regan: Bye now.
The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.