The challenge
Our company is restructuring several departments in order to create a combined service to boost efficiency and customer focus.
The restructure will create vacancies, so there will be a position for everyone involved.
Essentially, there are five teams. Two of the teams are staying as they are (A&B). A further two teams will be created from existing teams and some additional positions will be created at different levels, but essentially the skills and expertise required will remain the same (C&D).
The last team is to be completely renamed and will come with revised job descriptions (E). Most of the job specs are being renamed and standardised to fit into the new business process/structure. As a result, all staff, except for A&B team members, will have new job descriptions.
The managers wish to promote some existing staff into new positions. In addition, some of team D have discovered the salaries of some of the positions in teams A & B and are now saying that they want to apply for these jobs (even though they don’t have the requisite skills).
They feel that these jobs are at a higher level and would be a progression for them and are, therefore, very annoyed about the situation.
The restructure will mean that posts under their current job description are being made redundant, but the jobs themselves are being renamed and include amended duties. Some will also have salary changes for consistency’s sake in line with what the business requires.
So my questions are: do I have to treat these posts as being made redundant or can there be individual consultations to discuss the new structure further and show people where and how their current jobs map to the new positions?
Group consultation
We do not want anyone to feel that the changes are unfair, but the situation with regard to team A & B jobs is not really up for discussion as there is a post for each individual that is very similar to their current one.
Is it down to the skills of whoever holds the consultation meetings to gain agreement from employees as to where they think they should sit within the new structure?
Should I treat team E as being in a redundancy situation or just consult on the changes and obtain their agreement?
There may also be opportunity for someone to take a senior post within team E. I presume that if there are a number of people in the team who want the senior post that we should interview? Or can I just discuss scoring with them? What if they refuse?
Do we have to show people all of the jobs that are part of the proposed new structure, even if line managers are confident that existing staff will successfully map onto these roles?
If employees want to apply for jobs in different teams, should such posts be up for interview, including the (current) post holder?
We are going into group consultation to explain about the restructure next month and will subsequently hold individual consultations. Around 70 staff will be affected.
Any advice or help would be very much appreciated as I am only two months in post and want to get this right, but I do seem to be getting a bit in a muddle.
The legal verdict
Esther Smith, a partner at Thomas Eggar
There is rather a lot to respond to in your question, and obviously without taking full and detailed instructions, I cannot give any specific advice. However, I have tried to address some of your questions in general terms.
In relation to the A&B people, if their roles are substantially unaffected by the restructure, you might be able to treat their situation as a variation of contractual terms rather than a redundancy.
This would be on the basis that you have an on-going requirement for them to perform the jobs that they were employed to undertake, albeit with a slight variation, rather than their roles being redundant per se.
The position with the E people is probably the same, assuming that the changes are predominately cosmetic rather than being of any substance. If this is correct, you have a good argument for saying that this would not comprise a redundancy situation.
In both these cases, consultation with employees regarding the proposed changes to their title or duties should be carried out with a view to reaching agreement.
But any vacancies should be protected for those people who are actually at risk of redundancy due to the restructure, rather than being open to staff members whose jobs continue (subject to minor variations).
Given the numbers affected by this restructure, as well as having to undertake individual consultations, you may also need to comply with collective consultation requirements, which are quite prescriptive. So the best suggestion that I can give is that you take specific advice on this situation.
Esther Smith is a partner in Thomas Eggar‘s Employment Law Unit.
Adam Partington, a solicitor at Speechly Bircham
The need for redundancy can arise in a number of ways, including if the requirement for employees to do work of a particular kind ceases or diminishes. But it is not entirely clear whether a redundancy situation technically applies here. This issue would need to be explored further to determine the correct position.
However, it might be that, regardless of the technical position, it suits you to present this as a redundancy situation to employees in order to help you achieve the reorganisation that you require. But you should take specific advice before making a decision as there are risks involved.
If you decide it is appropriate to go through a redundancy exercise, you will need to comply with your procedural obligations, including individual and potentially collective consultation.
If the redundancy exercise could result in between 20 and 99 redundancies, it will trigger collective consultation obligations, meaning that you would have to collectively consult with those employees for a minimum period of 30 days before you could dismiss any of them.
There are a number of specific requirements involved in collective consultation such as electing employee representatives and providing adequate information, so you should take advice on this.
Breaching individual consultation obligations will expose you to unfair dismissal claims and breaching collective consultation obligations will expose you to claims for a “protective award”, which is up to 90 days gross pay for each dismissed employee.
Redundancy process
As part of a redundancy process, you will need to consider how individuals are selected for redundancy (for example, whether pools of employees with selection criteria and scoring are required).
Redundant employees will also have to be made aware of any vacancies, a corollary of which will be to work out how you choose which staff members to which to make any offer of alternative employment.
You likewise need to be prepared to cover statutory redundancy payments (and contractual redundancy payments, if you operate a contractual redundancy scheme).
If a redundancy exercise is inappropriate, however, there are alternative options to help you achieve changes to employees’ roles. The best method is to obtain the agreement of personnel themselves to the proposed changes.
However, in the event that you are unable to achieve such agreement, the situation becomes more challenging – although one option is to dismiss and offer to re-engage your employees on new terms and conditions.
You need to be careful how you do this though in order to avoid unfair and wrongful dismissal claims. Also, be aware that collective consultation obligations are likely to apply given the number of employees involved.
The answers to your other questions, meanwhile, will depend on a detailed understanding of the specific circumstances and the approach that you decide to adopt.
Adam Partington is a solicitor at Speechly Bircham LLP.
