Redundancy Policy

About this Policy

 

This policy sets out the Society’s approach to dealing with potential redundancies in a way that is consistent with our DOES values.

The Society will always try to avoid the need for compulsory redundancies but recognises there may be circumstances where staffing requirements change, and compulsory redundancies cannot be avoided.

Whenever reduction in colleague numbers may become necessary, the Society will:

• Consult with colleagues and, where appropriate, their representatives on any proposals and their implementation.

• Undertake any selection for compulsory redundancy fairly, reasonably and without discrimination.

• Explore ways of avoiding compulsory redundancies.

• Communicate clearly with all affected colleagues and ensure that they are treated fairly.

 

This policy applies to all colleagues (whether employed on a full-time, part-time, fixed term or permanent basis). It does not apply to agency workers or self-employed contractors.

This policy does not form part of any colleague’s contract of employment and we may amend it at any time.

 

 

Avoiding Compulsory Redundancies  

 

Where the Society is proposing to make redundancies we will enter into consultation with all affected colleagues on an individual basis and, where appropriate, also collectively consult with USDAW (our recognised trade union) and/or colleague representatives.

In the first instance we will consider steps that might, depending on the circumstances, be taken to avoid the need for compulsory redundancies. Examples of such steps include:

 

• Reviewing the use of agency staff, self-employed contractors and consultants.

• Restricting recruitment in affected business areas in which affected colleagues might be redeployed.

• Reducing overtime in affected business areas to that needed to meet contractual commitments or provide essential services.

• Freezing salaries for a specified period.

• Consider the introduction of short time working, job-sharing or other flexible working arrangements, where these are practicable.

• Identify suitable alternative work within the Society or redeployment that might be offered to potentially redundant colleagues.

• Invite applications for early retirement or voluntary redundancy. In all cases the acceptance of an application for voluntary redundancy will be a matter of our discretion and we reserve the right not to offer voluntary redundancy terms or to refuse an application where it is not in the interests of our business to do so.

 

Any measures adopted must not adversely affect our business and our ability to serve our members and customers.

 

 

 

Individual Consultation

 

When it is not possible to avoid making compulsory redundancies, we will consult with the affected colleagues at the earliest opportunity. This is known as individual consultation and its purpose is to consult fully with each affected colleague to explain the potential impact on them.

We will also notify USDAW (our recognised trade union) of the proposed redundancies before the consultation commences. Where 20 or more colleagues are proposed to be dismissed at one of our locations, we will also consult on a collective basis (see Collective Consultation).

The duration and number of meetings for individual consultation will depend on the circumstances. However, we will ensure that full and meaningful consultation takes place with all affected colleagues. Where a colleague is placed at risk of redundancy, we will ensure that:

• The reasons for the proposed redundancy are explained in writing.

• Any selection criteria being used are explained and the colleague’s score is shared with them so it can be understood.

• Adequate consultation takes place with the colleague in the form of redundancy consultation meetings.

• That alternatives to redundancy (including other vacancies in the Society) are fully considered.

• The amount of any redundancy payments is explained.

• Colleagues are given the right to attend formal consultation meetings with a Trade Union representative or work colleague.

• Where their redundancy cannot be avoided, colleagues are given a right to appeal.

 

 

Collective Consultation

 

Collective consultation takes place where we propose to make 20 or more redundancies at one of our locations (e.g. a store or office) within a 90-day period. This is known as collective consultation, which we carry out with USDAW, as our recognised trade union.

Collective consultation is in addition to individual consultation (they run side by side) and the duration of it depends on the numbers of affected colleagues. Where the number of proposed redundancies is between 20 and 99 colleagues, the collective consultation will start at least 30 days before the first redundancy takes effect. Where 100 or more redundancies are proposed, consultation will start at least 45 days before any dismissals take effect.

The purpose of collective consultation is to provide the trade union with adequate information so that both sides can agree the consultation process, including any ways of reducing the potential number of redundancies.

 

 

Outplacement Support

 

Outplacement support is assistance provided to a colleague that has been made redundant to assist them in finding a new job externally. The support can consist of assistance with CV writing and preparing for job interviews.

All colleagues who are confirmed as redundant will be offered a level of outplacement support as detailed below:

 

Career Levels	Outplacement Support
1-5	Internal outplacement support provided by the L&D department.   The support will focus on CV writing skills and interview techniques, to assist in preparing the colleague to find alternative work as soon as possible.
6-11	Enhanced level of outplacement support through our external partners Renovo.   The level of outplacement support that will be offered and what the package contains will be discussed with you in more detail as part of the consultation process.

 

 

Alternative Employment

 

An important part of a redundancy consultation is exploring alternative employment across the Society’s businesses. Where a colleague is at risk of redundancy, suitable vacancies will be discussed, and the colleague should also regularly monitor the Careers website which can be accessed through Colleague connect.

Where a colleague wishes to apply for a vacancy, they will usually be interviewed for it. Where successful in securing the vacancy, the colleague will move onto the contractual terms of the new role (i.e. salary, location, hours of work) and their redundancy will be avoided.

Where the alternative role is different to the colleague’s previous role, it will be subject to a four-week trial period. The purpose of the trial period is for both the Society and the colleague to assess the suitability of the alternative employment for the colleague. During the trial the colleague and line manager should discuss progress to see how things are going.

At the end of the trial period, a meeting should be held so that both sides (colleague and line manager) can confirm whether it is agreed that the colleague will continue in the role. Where either side considers the trial to have been unsuccessful, the colleague will be made redundant and is entitled to receive a redundancy payment.

 

 

Pay Protection

 

The Society wants to encourage any colleague placed at risk of redundancy to remain with the Society and seek alternative employment. The following pay protection applies depending on the level of the alternate role in the career framework.

Alternate role at same level or up to two levels below current role

Any colleague who, as an alternative to redundancy, accepts a permanent role at a lower rate of basic pay than in the role being made redundant, will have their basic pay protected. When this happens the colleague’s salary (based on their contracted hours and basic hourly rate) will be ring fenced for a period of 26 weeks and this amount will continue to be subject to normal payroll deductions.

Alternate role at more than two levels below current role

If a colleague accepts a role which is more than two levels below their previous role, their salary will move to the top of the pay band which applies to the new role for a period of 26 weeks before moving to the applicable pay rate. This level of pay protection reflects that they have chosen to take a significantly more junior role as an alternative to redundancy.

 

Calculating pay protection

The pay protection relates to the basic hourly rate of pay and no other factors. For example, where the alternate role is on fewer contracted hours than the role being made redundant, salary will be protected basic pay x contracted hours in new role.  

Pay protection would not apply when a colleague accepts a lower paid role on a Fixed Term Contract or Secondment as redundancy terms will still be offered at the end of the fixed term or secondment with the redundancy entitlement calculated on the original role that has been made redundant.

Where a colleague is in receipt of a Company Car or Car Allowance from the Society then this will also be protected for a period. The level of protection will be discussed with colleagues on an individual basis as part of their redundancy consultations.

 

 

Notice

 

Where a colleague’s redundancy cannot be avoided, they will be given written notice of redundancy in accordance with their contract. The Society will usually require a colleague to work their notice period before redundancy takes effect.

Where a colleague is working their notice period and secures an external vacancy, which starts before the end of their notice, the Society will, where possible, allow the colleague to leave sooner. Where that happens, the colleague will receive any redundancy entitlement but will forgo the remaining notice pay. This will be subject to the colleague’s early release not negatively impacting on the Society’s business requirements.

Any colleague who chooses not to work their full notice period may be subject to additional tax and NI deductions on the enhanced element of their redundancy pay due to Post Employment Notice Pay (PENP).

In some circumstances the Society may consider making a payment in lieu of notice (PILON) or placing the colleague on gardening leave. However, that will depend on the relevant circumstances of the redundancy, including whether there is ongoing work that the colleague can support during their notice period.

The Society recognises that colleagues who are under notice of redundancy may be looking for their next employment opportunity. We will continue to explore alternatives with the Society during their notice period and colleagues should continue to monitor the Careers website which can be accessed on Colleague Connect.

Colleagues under notice of redundancy or during the consultation period will also be entitled to take a reasonable amount of paid time off work to attend interviews for external vacancies. Colleagues wishing to take advantage of this should speak to their line manager.

Notice pay, whether worked or paid as a PILON will be taxable in the usual way.

 

 

Redundancy Pay

 

If, at the end of the consultation process the colleague is confirmed as redundant, they will be given formal notice of termination of their employment due to redundancy. Colleagues will receive written confirmation of the redundancy payment they will receive. The final redundancy payment and holiday entitlement will be calculated as at the last day of employment. Holiday pay is explained further below (holiday pay).

All Society colleagues will qualify for an enhanced redundancy payment. Unlike the statutory redundancy scheme, there is no two years’ service requirement in order to qualify and there is no limit on the amount of a week’s pay used for the calculation.

All Society enhanced redundancy payments are made inclusive of statutory entitlement. Redundancy pay is based on a colleague’s gross basic pay. Any redundancy pay under £30,000 is not taxable.

The Society’s enhanced redundancy calculation is based on the government’s statutory calculator (known as the ready reckoner). The statutory calculator gives a multiplier based on the colleague’s age and complete years of service. The Society uplifts the statutory multiplier by 50%. For the purpose of the calculation, weekly pay is uncapped.

The enhanced redundancy matrix sets out the multiplier based on age and length of service. This gives the number of weeks basic pay that the colleague would receive. Please note: the length of service is capped at 20 years, for example if a colleague has worked for the Society for 23 years, they will receive redundancy pay calculations for 20 years.

 

 

Holiday Pay

 

Colleagues who are made redundant will also be entitled to receive a payment in respect of any accrued but untaken holidays. Holiday pay will be calculated up to the colleagues last day of employment.

Where a colleague has accrued but untaken holidays remaining at their last day of employment, the Society will make a payment in lieu of it. Where a colleague has taken holidays in excess of their accrued entitlement, a deduction will be made from the final payments owed to the colleague.

Colleagues may be required by their line manager to take any accrued holidays during their notice period. Where the Society makes a payment in lieu of notice (PILON), holidays will be calculated up to the last day worked, and the period of any PILON will not count towards holiday accrual.    

 

 

Colleague Membership Discount Card

 

Where a colleague has 20 or more years’ service and is made redundant, they will be entitled to retain the colleague discount on their membership card. For all other colleagues, the colleague discount will end on their last day of employment.

 

 

Other Benefits

 

Where a colleague is made redundant, any other benefits (such as Society car, allowance or bonus entitlement), will be treated in accordance with the terms of the colleague’s contract/relevant scheme. This will be discussed with the colleague during the consultation.

In certain circumstances it may be relevant to offer colleagues a retention bonus/payment for them to remain in the Society to complete key pieces of work before any redundancy may take effect. It is at the line managers discretion as to whether a retention bonus/payment should be applied and the value attributed to this, however a consistent approach should be applied in each individual project. Any such payment will be subject to normal payroll deductions.

 

 

Returning to Work for the Society

 

Where a colleague is made redundant and wishes to return to the Society within 26 weeks of their redundancy taking effect (i.e. their last day of employment), the Society may request that the colleague pays back the enhanced element of their redundancy payment. Where the colleague returns after 26 weeks no such payments will be recovered. 

 

 

Appeals

 

Redundant colleagues may appeal against the decision to dismiss by reason of redundancy.  Redundant colleagues will have five working days from the date of the confirmation of redundancy letter to lodge an appeal, setting out the grounds of the appeal, in writing to the person named in the redundancy confirmation letter or the Head of Colleague Relations.

The Society will arrange for an appeal meeting to be conducted. The colleague will have the right to be accompanied by a fellow colleague or trade union representative at the appeal meeting.The outcome of the appeal meeting will be notified to the colleague in writing as soon as possible and will be final.

 

 

Additional Support

 

If you have any questions regarding this policy or require additional support, you should speak to your line manager. Alternatively, you can contact the HR advisor for your business group or email HR.advice@midcounties.coop.