Restructure and Redundancy Advice

Businesses will sometimes need to implement a restructure. If this is for economic reasons, it can result in redundancies, but this is not always the case. A restructure could also involve the redistribution of work among the same number of employees, resulting in a variation in their contracts. Alternatively, if a business changes ownership, employees may need to be transferred to the new entity.

During any restructure, it is essential that the employer follows a fair process and provides sufficient consultation. Any breach of contract or unreasonable variation could give rise to claims for constructive or unfair dismissal.

For a redundancy to be lawful, employers are required to follow strict procedures, and employees are entitled to certain rights, including:

• Redundancy pay (where you have been employed for two years or longer)
• Sufficient notice
• Time off to look for a new job
• The opportunity to move to a different role with the same employer
• A consultation with your employer

However, employers do not always follow the correct process, and in certain situations employees can bring claims for unfair dismissal. Selection can also be tainted by discrimination, and if an employee is dismissed or subjected to a detriment because of a protected characteristic, they can bring a claim for discrimination.

Variations in Contracts

For a variation in contract to be lawful, employers must keep employees informed at all times and provide adequate consultation and notice. Even when there is a variation clause in the contract, any change must still be reasonable. For example, an employer can vary an employee’s hours to meet a change in demand, but it cannot significantly reduce an employee’s hours and pay.

If an employee does not agree with the variation, they may:

• Refuse to work under the new conditions
• Work ‘under protest’
• Resign, and submit a claim for constructive dismissal

TUPE

When a business, or a part of a business, is transferred to a new owner or merges with another company to form a new entity, there are protections in place for employees and obligations to be met by the employers under the provisions of the Transfer of Undertakings (Protection of Employment) Regulations (‘TUPE’).

We can help guide employees and employers through this process to make sure the transfer is lawful.

For further advice please contact one of our Employment experts today.