The question
We are a company with five permanent staff. One role has ‘lost’ much of its workload after the work was moved offshore. The person fulfilling that role is now left trying to find enough things to do much of the time. What are my options here?
- Can I legally redefine the role as a two-days-per-week job?
- Can I make the position redundant and ask the employee to contract back to us for the remaining two days but work remotely (this would fit with the role)?
- What other legal options do I have?
The legal verdict
Esther Smith, partner at Thomas Eggar
The first point here is that the offshoring of the employee’s role may have given rise to a TUPE transfer situation in law and, therefore, an opportunity to address it through the appropriate route may have been missed.
If it did amount to a TUPE transfer scenario, it would have been necessary to transfer the staff member and their work when it was offshored.
While the individual concerned may not have wanted to relocate to wherever the work is currently being undertaken, their employment would have passed to your services provider, which would be responsible for, and assume the risk relating to, any subsequent dismissal.
This situation has clearly not taken place, however, and I am not sure from your question how long it has been since the work was transferred.
It appears that the most appropriate route for dealing with this situation now is one of redundancy, given that your requirement for someone to undertake the work that they were employed to do has diminished.
While this would mean declaring the current five-day-a-week role redundant, part of a fair process for handling such a redundancy would include giving the employee an opportunity to take up any alternative work available, including part-time roles, as an alternative to dismissal.
If the staff member rejects the offer of a two-day-a-week post, it would become necessary to make them redundant, which would entail paying them statutory redundancy money. This is because their refusal to undertake part-time work, given that they previously worked full-time, is likely to be seen as reasonable.
The option of contracting the employee back in to work in the two-day-a-week role would seem a little dubious, however, as it appears that the nature of the job would not change. The problem is that to artificially change the status of the individual from employee to contractor could cause issues with HM Revenue & Customs.
Esther Smith is a partner in Thomas Eggar‘s Employment Law Unit.
Martin Brewer, partner at Mills & Reeve
Actually you can do both of the things you mention. It seems to me that the original work for which this employee was hired has disappeared (full-time work undertaking the duties of whatever the role was) and if you don’t have any other work for them to do, they may be surplus to current requirements.
Therefore, since the business appears to require one less employee, it amounts to a redundancy situation. There was a technical legal debate for many years over whether reducing a job from full- to part-time status actually constituted a redundancy situation, but the law has now been clarified to show that it does.
As a result, subject to following a fair process, you are entitled to remove this full-time job and reduce your workforce by one. The duties that still need to be done could be dispersed among your remaining staff.
Alternatively, you could, as suggested, create a part-time role and offer it to the redundant employee as an alternative employment option or offer them work on a non-employed basis.
It is also important to consider whether the person to be dismissed as redundant should be the same person who is in the diminished role (is it a unique role, for example?) or should an employee be selected from a defined pool of personnel?
This situation will depend on the extent to which roles in your business are similar, or even wholly interchangeable. But selection, if necessary, should be reasonable and based on justifiable criteria.
You should likewise consult with the employee concerned about their selection, remembering that you have a duty to look for alternative employment for them – although that should not be much of an issue in such a small business.
Martin Brewer is a partner at law firm, Mills & Reeve LLP.
