Redundancy Agreement and a Fair Process of Selection (Model)
Model security of employment and redundancy
This policy should be read in conjunction with the redundancy guidelines published by JACS
1. Statement of intent
It is the Employer's intention to develop and expand the business activities of the organisation and in the course of this, provide a secure and stable work environment for its workforce. It will plan its manpower requirements based on the organisation's objectives and business forecasts and by adjusting recruitment, overtime working and utilizing natural wastage to plan and maintain a stable workforce. However, circumstances may arise due to organisational requirements, changes in the market and health & safety related issues etc. that necessitate a reduction of staffing levels to ensure the economic viability of the organisation. In order to minimise the impact of such reductions, the following procedure will be adopted wherever possible. It must, however, be recognised that where the need of the business so dictates, and after consultation with staff, the procedure would need to be adapted to the particular exceptional circumstances which prevail.
2. Scope & application
This Policy applies to all employees of the organisation. The employer recognises the need for the interests of the staff to be represented and to this end will inform staff at the earliest possible stage of any potential reduction to its staffing requirements. Informal discussions will follow as to ways of avoiding reductions and addressing any issues arising. Due to commercial sensitivity these discussions may, by necessity, be of a confidential nature. If however, staff reductions seem unavoidable, the employer will commence formal consultation with staff and affected employees, as detailed below. The staff (Staff Association/Trade Union) recognises the employer's responsibility to plan its use of staffing levels in light of the types of personnel and skills required for the operating needs and continuation of the business.
Where 12 or more redundancies are possible at one establishment within a period of 30 days or less the employer will comply with the collective consultation requirements of the law.
3. Informal discussion stage - measures that can be taken to avoid or minimise redundancies
Where the possibility of a reduction in the number of employees arises, Management will enter into discussions with the staff with a view to establishing whether the proposed job losses can be avoided or achieved by means other than by compulsory redundancies. The following actions will be considered as a means of avoiding redundancy.
In a potential redundancy situation, the employer will ban the recruitment of new permanent staff, other than where this is essential. The employer will seek to recruit from internal candidates, whenever possible. If an internal candidate is unsuccessful, they may request feedback from their Manager/Personnel Manager as to why.
3.2 Sub contractors and Temporary Staff
Should a redundancy situation arise, the employer will restrict the use of subcontractor and agency workers, other than where this is essential. Staff employed on fixed term contracts may have the same rights as permanent staff depending upon the specific terms of their contracts and, where this is the case, will be treated as such. Where possible, having taken account of the needs of the employer and current legislation, the sub contractors and agency workers will be replaced by internal permanent staff. Volunteers and/or work experience students will not be used to substitute for permanent staff.
3.3 Overtime Working
The employer will limit overtime working in a potential redundancy situation but will not compromise health and safety and operational requirements. If necessary, operational requirements may be modified to allow for non-overtime working.
3.4 Short Term Problems
Where short term problems are experienced from a fall in demand, enforced closures or any other reason which prevents the employer providing normal work for any or all of its employees, the employer may, after discussion with the staff, ask employees to undertake duties outside of their job descriptions
In exceptional situations, as an alternative to introducing compulsory redundancies, the employer may, after discussion with the staff, ask employees to:
Voluntarily take a reduction in wages, or
Work extra days without pay, or
Consider the introduction of temporary short time working or lay-offs (where their individual contract of employment does not already allow for this).
The employer will also consider applications from individuals who wish to reduce their working week or "job share" for the duration of the prevailing adverse conditions. The terms and conditions under which the job share will operate will be agreed in advance and confirmed in writing.
4. Formal consultation stage (including formal notification to staff)
4.1 Formal Consultation with the employees or Staff Association/TU Committee or elected representatives
When it appears that redundancies are inevitable the employer will formally consult with the staff. The employer will identify departments and pools of jobs at risk and confirm the selection criteria with staff. This will be in accordance with the legislation current at the time of the proposed redundancies. Collective consultation requirements are included in the statutory rights relating to redundancy and in the interests of best practice, the employer will notify the staff as to the proposed redundancies and consult with the staff, with a view of reaching agreement on:
Ways of avoiding redundancies
Reducing the number of employees to be dismissed, and
Mitigating the consequences of the dismissal
4.2 Measures to avoid compulsory redundancies
(NB the following are not sequential and can operate individually or simultaneously)
4.2.1 Voluntary redundancies
Should a redundancy situation become inevitable, management will call for volunteers from the affected group of employees. Volunteers from outside the pool of affected employees will be considered. However, management reserves the right not to accept volunteers who have key skills. Whilst management will consult with the staff as to what constitutes "key skills" the final decision will be for management to make.
4.2.2 Voluntary early retirement
In a redundancy situation the employer will invite applications for early retirement from all employees. However, the employer reserves the right not to accept volunteers who have key skills. Early retirement will be in accordance with the terms of any relevant pension scheme.
Wherever possible the employer will try to re-deploy staff who are under threat of redundancy into other areas of work. If a vacancy exists, all potentially redundant employees will be asked if they wish to be considered for the post. Those wishing to be considered will be interviewed by management to establish individual requirements and to consider the employee's suitability for the particular post. Unsuccessful candidates will, if they so request, be granted an interview with a relevant manager who will explain why they were unsuccessful.
Individuals will be given a trial period in the new post; the length of this trial period will be a minimum of 4 weeks or such longer period as may be agreed. During the trial period, assessments will be made as to the individual's capability. If an individual fails the assessment, or feels unsuitable for the post, they will then be made redundant and, if entitled, will receive the appropriate redundancy payment.
4.3 Compulsory redundancy
If, having taken all of the steps to avoid or minimise redundancies, the number of employees still exceeds the number of people required, the employer will use fair, consistent, objective and non discriminatory methods of selection which will ensure the retention of a balanced workforce, appropriate to the future needs of the business.
To determine which employees will be considered for redundancy the employer will identify a pool of jobs or departments at risk. The employer will consult with staff as to the composition of this pool although the final decision on this issue will be for management to take. From this pool, a selection will be made in accordance with the criteria detailed in Appendix 1. The employer reserves the right to exclude individuals from any selection pool on the grounds that the individual concerned holds key skills that the business needs to retain.
5. Individual employee consultation
As far as possible in advance of the proposed redundancy date, Management will notify those employees provisionally selected for redundancy. The employees at risk will be interviewed personally, informed of the basis of their provisional selection for redundancy and invited to make representations as to why they should not be selected. In effect, this will enable staff provisionally selected to appeal against the decision made. Employees have the right to be accompanied at this interview by a work colleague (Staff Association representative or a trade union representative), if they so wish.
Management will take into full consideration any representations made during the interview, clarifying and exploring any points raised. Only after all reasonable options have been examined and eliminated will the redundancy be confirmed. If information comes to light in the interview to change the basis of selection, an alternative member of staff may then be selected, but will also have the right to make representations as to why they should not be selected.
When selection has been confirmed, those selected for redundancy will be given notice of termination in accordance with their contractual or statutory entitlement, whichever is the greater. In certain circumstances, when it is considered appropriate, payment in lieu of notice may be made.
An employee who wishes to appeal against their redundancy must do so to a named person - preferably to someone who has not previously been involved in the matter - within 5 working days. The employee must clearly state the reasons for their appeal. The employer will then hear the appeal at the earliest opportunity and decide the case as impartially as possible, confirming the outcome in writing. Where possible, the appeal will be heard by a person other than the person who made the initial redundancy decision.
7. Severance payments
Compensation for loss of employment due to redundancy will be in accordance with statutory requirements current at the time of termination.
In addition to any statutory payments that may be due, the employer may agree additional payments to those volunteering to be made redundant or those selected for compulsory redundancy. Decisions as to whether or not additional severance payments are made will be decided at the time of any redundancy situation by Management after consultation with the staff (Staff Association/TU). The final decision as to additional severance payments will be for Management to determine.
8. Offer of alternative work
If circumstances change such that the employer is able to make an offer of the same, or similar suitable employment to start within 4 weeks of termination, the employee will not be entitled to receive a redundancy payment. The meaning of 'the same, or similar suitable employment' is as defined in the Employment (Jersey) Law 2003 as amended (see JACS redundancy guidelines).
8. Policy implementation and review
This policy will be effective from the date of signing. It will be reviewed annually by Management, (in conjunction with the Staff Association/TU), to ensure its currency.
Should it be necessary for the employer to introduce compulsory redundancies, the following selection criteria will be used. Points awarded under the relevant factors as detailed below, will be awarded to each individual within the relevant pool, and a rank order produced. The lowest ranked individuals will be selected first and so on up the rank until the necessary numbers of redundancies are achieved. In the event of an identical points score, length of service will be used as a determining factor, the individual with the shorter service being selected for redundancy.
1. Disciplinary Record
Any disciplinary warning on record will contain a stated time limit for its duration, e.g. 3, 6 or 12 months. Points will be awarded on the basis of formal warnings that are current during the preceding twelve months of the Redundancy Exercise. Warnings issued under the disciplinary procedure for poor attendance will be excluded from this section so as to avoid double counting with the Attendance criteria. The points will be awarded as follows: -
No current warnings = 5
Verbal warning on record in previous 12 months = 3
Written warning on record in previous 12 months = 1
Final written warning on record in previous 12 months = 0
2. Attendance Records
The selection criteria for attendance will be based on the employer's records of absence over the preceding two years. "Absence" relates to sickness absence or unauthorised absence. It does not relate to absence on company business, holidays, special leave, or in relation to statutory duties e.g. jury service etc. Points will be awarded on the basis of the number of occasions a person has been absent and the number of days they have been absent the points scored will then be divided by two. Absences for pregnancy related issues and/or related to a disability will be discounted. Properly recorded accidents at work will also be discounted.
Up to two absences = 5
Three or four absences = 4
Five or six absences = 3
Seven or eight absences = 2
Nine or more absences = 0
Up to 5 days = 5
6 to 10 days = 4
11 to 15 days = 3
16 to 25 days = 2
26 days absence or more = 0
Performance will be determined through the jointly agreed appraisal scheme.
In the absence of such a scheme, performance criteria will be assessed using the following guidelines:
For most staff - assessment is by supervisor or line manager
For supervisory staff - assessment is by line manager and Head of Department
For managers - assessment is by Head of Department and Director
For Head of Department - assessment is by Director
All assessments and scoring of individuals will be on a predetermined format. Personnel will ensure that all supervisors, line managers, Heads of Department and the Director have a common understanding of the criteria for scoring. The assessors will independently score the individuals in the relevant pool and only on completion of this exercise will scores be compared. Any discrepancies between the scores will be resolved through debate. A final, agreed score sheet will be signed off by the supervisors, managers and Heads of Department involved, recording the reasons for any discrepancies between the original scores and the grounds under which the discrepancies were resolved. The Personnel Manager will review all scores for staff up to and including managers, for consistency during the period prior to introduction of a jointly agreed appraisal scheme. The original sheets and the agreed final score sheet will be retained by personnel for a period of six months. If after the introduction of a new appraisal scheme the definitions for how points are awarded are no longer appropriate, the definitions will be amended after consultation staff.
Overall Performance (OP)
OP outstanding and consistently exceeds the requirements of the job = 10
OP exceeds the requirements of the job = 8
OP meets the requirements of the job = 6
OP meets most of the requirements of the job = 4
OP fails to meet the requirements of the job = 0
NOTE: These criteria and associated scores are suggestions only. It is for the organisation to determine whether they are adequate or whether different criteria (or scores) are relevant.