Following a reorganisation in the business, one member of staff has asked to be made redundant yet the employer does not view it as a redundancy situation. Esther Smith, partner at Thomas Eggar, and Martin Brewer, partner at Mills & Reeve, advise on what to do.
We have a member of staff who has recently moved to another location following a reorganisation in the business two months ago. We have a mobility clause in our contract and the move was carefully managed and agreed to by all parties.
This man is over 65 and was the first since the change in the law to request to work on – to which we agreed. So far so good. However he does not get on well with his new supervisor and has been complaining about having to travel further to work. In a discussion with his area manager he suggested that we make him redundant. His exact words were: “Why don’t you sack me? Make me redundant.” We are currently looking very closely at our costs but we are not in a redundancy situation and something about this situation is making alarm bells ring for me.
Esther Smith, partner, Thomas Eggar
I think you’re right to have alarm bells ringing. From what you say there is no redundancy situation here and to dismiss an employee for a ‘sham’ redundancy is inherently risky. It would only be a redundancy situation if the employer’s requirement for someone to do the work for which he was employed had ceased or diminished. Clearly this is not the case, and the job remains, and the fact that he has recently moved location is in my view a bit of a red herring.
I note that this employee has stayed on beyond 65 by agreement, and I assume therefore that a new retirement date has been agreed with him. You need to follow the usual retirement procedure in advance of this new retirement date, just as you would have done in approaching his 65th birthday, so you need to write to him between six and 12 months in advance of that date, again informing him of his ability to request to stay on. If he does not want to continue beyond that date he will be dismissed by reason of retirement then.
However, if he wants to leave before the new retirement date he can, like any other employee, resign his position at any time.
Esther Smith is a partner in Thomas Eggar’s Employment Law Unit. For further information, please visit Thomas Eggar.
* * *
Martin Brewer, partner, Mills & Reeve
You are right to hear alarm bells. You can only dismiss someone as redundant if they are redundant within the meaning of the Employment Rights Act 1996. This employee does not sound as though he is in a redundancy situation.
However, if he wishes to leave, and you are happy to facilitate it, then one way forward would be to agree to a compromise agreement under which the employee agrees to leave in return for you paying him a sum of money (perhaps equivalent to his redundancy payment) and under which he agrees not to make any claims against you. You will need advice from your solicitor on drafting this but it is pretty straightforward and may well suit everyone’s best interests.
* * *