Human Resources Redundancy Standard Operating Procedure Document Control Summary Status: Replacement Version: V1.0 Date: January 2017 Author/Title Owner/Title Sarah Guy, Workforce and Development Manager Alyson Sargeant, Head of Recruitment and Resourcing Approved by: Policy and Procedures Committee Date: 23 rd March 2017 Ratified: Policy and Procedures Committee Date: 23 rd March 2017 Related Trust Strategy and/or Strategic Aims Implementation Date: Review Date: Key Words: We value our staff 1 st April 2017 April 2020 Organisational Change, Contracts, Redeployment, Protection of Pay, Redundancy Associated Policy or Standard Operating Procedures Organisational Change Policy Contents 1. Introduction... 3 2. Purpose... 3 3. Scope... 3 4. Definition of Redundancy... 3 4.1 Fixed Term Contracts... 4 4.2 Alternative Action... 4 4.3 Consultation... 4 4.4 Collective Consultation... 5 4.5 Individual Consultation... 5 4.6 Right to Representation... 5
4.7 Principles of the Consultation... 6 4.8 Selection for Redundancy... 6 4.9 At Risk... 7 4.10 Potential Suitable Alternative Employment... 7 4.11 Notice... 7 4.12 Help Packages... 8 4.13 Right of Appeal... 8 5. Related Trust Documents... 8 6. Process for Monitoring Compliance and Effectiveness... 9 7. References... 9 Change Control Amendment History Version Dates Amendments Page 2 of 9
1. Introduction The Trust recognises that its employees are its single most important asset and is committed to protecting the employment security of employees through effective workforce planning. There may, however, be some occasions such as changes to funding provision, the demand for services or the way they are delivered and/or a change in the demand at a national or local level which require changes to staffing within the Trust. Where a change in circumstances meets the definition below, a redundancy exercise will be carried out. This Standard Operating Procedure (SOP) sits under the Organsiational Change Policy and therefore should be read in conjunction with that and also the Redeployment, Organisational Change and Pay Protection Policies and SOPs. 2. Purpose The purpose of this SOP is to ensure there is a clear process to be followed in potential redundancy situations taking into account legislative obligations. 3. Scope This SOP applies to all employees employed by the Trust, including those employed on a fixed term contract where the justification for ending, non-renewal or non-extension of the fixed term contract is that of redundancy rather than that of some other substantial reason. See paragraph 4.1 on Fixed-Term Contracts below for further details. In situations where it is established that TUPE Regulations apply and individuals choose to object to the transfer, there will be no right to redundancy. In the event of redundancies being necessary, the principle aim of this SOP is to ensure that such redundancies are handled in a fair, consistent and sympathetic manner, without any form of discrimination. Wherever possible employees and staff side representatives will be engaged prior to any public announcement being made. 4. Definition of Redundancy Redundancy is defined in s.139 (i) of the Employment Rights Act 1996. The definition provides that an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to the following: The fact that the Trust has ceased or intends to cease to carry on the business for the purpose for which the employee was employed by the Trust, or The fact that the Trust has ceased, or intends to cease to carry on the business in the place where the employee was so employed, or The fact that the requirements of the business for employees to carry out work of a particular kind have ceased, or diminished, or are expected to cease or diminish, or The fact that the requirement for employees to carry out work of a particular kind in the place where the employee was employed by the employer have ceased or diminished or are expected to cease or diminish. Page 3 of 9
4.1 Fixed Term Contracts When a fixed-term contract comes to an end and is not renewed or extended, this constitutes a dismissal under English law. The reason for the dismissal will vary from case to case; however, the two main reasons for a dismissal of this sort will be redundancy, or some other substantial reason. The expiry of a fixed-term contract will normally be considered to be a redundancy if the work for which the employee was employed has diminished, or ceases to exist. This would cover projects, which have run their course, or where specifically funded work has come to an end due to an exhaustion of or non-recurring of funding. In these cases, the employee may be entitled to a redundancy payment provided that they have a minimum of 104 weeks continuous service with the Trust or any previous NHS employer at the date their employment ends. Employees who are employed to cover another employee s absence, and whose contract expires on the return of that employee would be deemed to have been dismissed for some other substantial reason and consequently this would not constitute a redundancy. In such cases the termination of a Fixed-Term Contract process should be followed and this would not attract a redundancy payment. However it would be best practice to inform the employee in writing within a reasonable time prior to the conclusion of the fixed term contract to confirm that it will end. 4.2 Alternative Action The Trust will make every effort to avoid compulsory redundancy and will wherever possible use some or all of the following approaches, at the relevant time, and as appropriate to the situation: Placing restrictions on further recruitment of new employees (in similar areas) Non replacement of leavers where there is no clinical risk identified through a risk assessment Re-training and redeployment for affected employees where appropriate to fill essential vacancies Restriction in overtime working and/or additional hours worked Reduced usage of subcontracted labour, agency and/or bank workers in circumstances where there is no clinical risk identified or where their usage is necessary prior to a closure situation or for special projects where specific skills or continuity are required Consideration of flexible working arrangements An agreed reduction in contractual working time 4.3 Consultation If after the consideration of these other alternatives, the Trust finds that there continues to be a need for redundancies; the Trust will provide written details of their proposals to staff side representatives via the Joint Staff Partnership (JSP) and/or the Local Negotiating Partnership (LNP). This proposal (which will drafted in line with Management of Change SOP) will include a provisional pool of affected staff taking into consideration the necessity to retain specific knowledge and skills and a balanced workforce to meet future service needs. In cases where there is a change in service need and/or the way a service is delivered, refer to the Organisational Change SOP. This may also result in redundancies where staff are displaced Page 4 of 9
and therefore consideration should be given to collective consultation in an organisational change situation (see section 4.4). A redundancy proposal will include the following information: The reasons for the proposed redundancies The number and description of the employees to be dismissed as redundant The total number of employees of each description employed The proposed selection criteria based on skills, experience, aptitude, job knowledge, qualifications/training, attendance, time-keeping, disciplinary record and any other factors to be determined locally and agreed in partnership with staff side Timescales The formulae for calculating redundancy payments 4.4 Collective Consultation As required by law where it is proposed to dismiss as redundant 20 or more employees at one establishment within a rolling 90 day period, consultation must take place with the appropriate representatives. A dismissal takes effect on the date when the employment contract comes to an end. The following collective consultation procedure will be followed: The case (see section 4.3 above) will be provided to the JSP to commence the consultation process Consultation will take place with regard to employees who are potentially affected, and not just those who are at direct risk of redundancy The main purpose of the consultation meetings will be to inform employees of the situation, and the reasons for the potential redundancy, the criteria and method of application to be used, and to consider any suggestions for avoiding or reducing the number of compulsory redundancies and mitigating the effects of dismissals Notes from any consultation meetings will be confirmed in writing to members of the JSP and made available to the employees concerned Individual consultation will also take place as appropriate, in addition to the collective consultation process. There is a duty to inform the Secretary of State for Business, innovation and Skills about proposed redundancies via a HR1. 4.5 Individual Consultation Where it is proposed to make less than 20 employees redundant then there is no legal requirement to undertake collective consultation, however individual consultation should still take place. In situations where a single job ceases to exist then the post holder will normally be the redundant employee in these scenarios the paper as described in section 4.3 may not be forwarded to the JSP. 4.6 Right to Representation An employee has the right to be represented, if they wish, at any formal stage of the process by either a Trust recognised Trade Union representative or a Trust employed work colleague. Page 5 of 9
4.7 Principles of the Consultation The Trust recognises the importance of individual consultation with all employees who are at risk of redundancy and therefore the following principles are applicable to all cases, including where collective consultation has taken place: The case (see section 4.3 above) will be provided to the JSP to commence the consultation process Once an employee has been selected as being at risk of redundancy, they will be consulted individually regarding the situation. The main purpose of the consultation meetings will be to inform employees of the situation and the reasons for the potential redundancy, the criteria and method of application to be used, and to consider any suggestions for avoiding compulsory redundancies. Additionally, if the employee is a member of the NHS Pension scheme and over 50, they will be signposted to the Trust s NHS Pension Department as they may have options that need consideration in terms of the payment that they can receive if they are later made redundant. The employee will be given the opportunity to explain and discuss any areas of concern surrounding the selection criteria, such as periods of long-term absence or other individual difficulties, and may make representation on their proposed dismissal Individual consultation may include looking at the options available to the employee, such as applying for redeployment, and considering any training or development that may be appropriate. The Trust s aim is to avoid redundancies by offering alternative employment where possible and wherever practicable Individuals can agree to waive their right to continued consultation and notice but this should only take place once meaningful consultation has ended. This must be requested by the employee in writing, following which the Trust will write to the employee confirming that he/she is waiving his/her rights to further consultation and giving him/her an opportunity to reconsider his/her decision. This letter will also confirm details of the contractual notice period (i.e. will he/she be required to work, go on garden leave, etc.) and set out final details such as the effective date of termination and any payments to be made 4.8 Selection for Redundancy In situations where it becomes necessary to select individuals for redundancy, the Service Lead, with appropriate advice from Human Resources, will consider the following: Where a single job ceases to exist, the job holder will normally be the redundant employee Where a number of posts are redundant or where it is proposed to reduce the number of posts in a situation where several employees carry out the same or similar jobs, then the employees whom it is proposed to make redundant will be identified from the appropriate pool by way of a selection process, based on specified criteria (HR advice should be sought around the selection process). The redundancy exercise must be screened to ensure there is no bias in the selection criteria, ensuring it does not disproportionately affect employees with a protected characteristic. The selection criteria will be determined in consultation with JSP and/or LNP Consideration of the most appropriate parties to be involved in the selection process will be appropriate to each situation Page 6 of 9
4.9 At Risk Following consultation, where staff have been selected for redundancy, they will be informed that they are at risk of redundancy. However before any post is made redundant the Trust must exhaust all potential suitable alternative employment options. 4.10 Potential Suitable Alternative Employment A potential suitable alternative post will, in the first instance be at the same or lower band than the employee s substantive post. However, the following points would be taken into consideration: Any potential loss of status/profession Location and cost of travel Working environment Current hours of work The individuals personal circumstances Skills, knowledge, experience and scope to retrain Cost of pay protection against any other costs Needs of service / skill mix Redundant employees who accept suitable alternative employment with the Trust will be entitled to a four week trial period. Where the post is broadly similar to the employee s current post in terms of pay, banding, levels of responsibility, skill etc. the post will likely be considered as a suitable alternative. If the employee subsequently does not accept this offer of a suitable alternative post then they may lose their entitlement to redundancy payment. Where an alternative post is offered to an employee, they may undertake their 4 week work trial period without affecting any entitlement they may have to redundancy compensation. The Redeployment Policy outlines the process to be undertaken to try to secure suitable alternative employment and ensure that the legal requirements under this are met; this policy should be referred to as part of this process. 4.11 Notice Where selection has been confirmed, those selected for redundancy will be given written notice of termination in accordance with contractual entitlements. Notice may be worked and paid as normal or the Trust may make a payment in lieu of notice for all or part of the notice period depending on the circumstances. Details of any redundancy payment and the right of appeal against their dismissal will be included in the letter. Employees meeting the NHS Pension criteria for early payment of their pension on being made redundant, will have a choice of options in terms of the payment they will receive. These employees will be required to complete a proforma attached to their letter and return it to Payroll Services as soon as possible in advance of their proposed leaving date. This will ensure that payments due are paid promptly if no alternative employment is found. Employees may be given notice of redundancy at the conclusion of the appropriate consultation period: After 30 days where it is proposed to make between 1 and 99 employees redundant After 45 days where it is proposed to make 100 or more employees redundant within a period of 90 days at one establishment Page 7 of 9
Redundancy payments will be paid in accordance with Section 16 of the Agenda for Change Terms and Conditions of Service Handbook. Employees will only become entitled to a redundancy payment upon written confirmation that that they have not secured suitable alternative employment with the same or another NHS Employer for a minimum of 28 days following termination of their employment. 4.12 Help Packages Whenever an employee is identified at risk, a number of measures can be implemented to assist the individual, according to their needs, to make the transition. Advice and support may include (but is not limited to) one or more of the following: Reasonable paid time off to complete applications and to attend interviews Reasonable time off to make arrangements for training for future employment Counselling Occupational Health and Wellbeing Help with CV s + Interview skills Subject to the Trusts operational requirements affected employees will be entitled to take time off work during their notice period to look for work or seek retraining opportunities. Requests for time off in the first instance should be made to their direct line manager. 4.13 Right of Appeal An employee who is given notice of dismissal due to redundancy has a right of appeal. The appeal should be lodged in writing within 10 working days following receipt of the notification of redundancy. The appeal should be made to the next level of management, setting out in detail the grounds for the appeal. An employee has the right to be represented, if they wish, at any formal stage of the process by either a recognised Trade Union representative or a Trust employed work colleague. 5. Related Trust Documents This Policy should be read in conjunction with the following: Organisational Change Policy and SOP Re-deployment Policy Pay Protection Policy Agenda for Change Terms and Conditions Handbook Medical and Dental Whitley Handbook and the relevant Terms and Conditions of Service for Consultants, Associate Specialists and Specialty Doctor Page 8 of 9
6. Process for Monitoring Compliance and Effectiveness The policy will be implemented through dissemination to managers within the Trust through Directorate DMT Reports. Line managers will be responsible for communicating the policy to their staff. This policy will be reviewed every three years or before if there are legislation or arrangement changes. The monitoring of this policy includes an annual audit that comprises of the following table. Where non-compliance is identified an action plan will be drawn up and monitored at the Workforce and Development Committee. Where remedial action can be taken immediately, the action must be recorded appropriately. 7. References This Policy should be read in conjunction with the following: Re-deployment SOP Pay Protection SOP Organisational Change Policy and SOP Agenda for Change Terms and Conditions Handbook Medical and Dental Terms and Conditions of Service for Consultants, Associate Specialists and Specialty Doctor Redundancy Policy Living our Values (LoV) Framework Page 9 of 9