Notice of "At Risk of Redundancy" - Questions I have

davethebb

I am a highly specialised engineer and after 27years of being employed by the same company I have been put on notice of pending redundancy as a cost cutting exercise. My employer has given me a enhanced settlement and a agreement to review. They will start the start the consultation process in two days but they have said that there will be a new position created (different name but duties the same as mine) but the salary is less than 50% of my current pay. My existing employment contract restricts me from working for our competitors for 6 months but he enhanced package does not seem to allow for this 6 months. Although there are other redundancies in my company my letter from HR states that "due to my unique role, we do not propose to pool you with any other employees" My questions are;
1) Does the fact that I am not being pooled with other employees indicate that I have been singled out?
2) Can they rename my position and offer it at a greatly reduced salary and expect that I would apply (or do they have to offer it to me)?
3) Can the prevent me from working for 6 months. My industry is very small and my experience very limited so I would find it difficult (at 54yrs) to find a different position in a different industry.
Thank you in advance.

GrumpyDil

1) not specifically. If there are no other employees doing a similar job to yours they have no one to pool you with.
2) Strictly they can't make your role redundant (remember that redundancy relates to roles not individuals) and then advertise an identical role just on a lower salary. They would need to make sure that there are differences between the two roles. 
3) Restraint clauses that prevent you from working have always been problematic. I would suggest that you read the original contract very carefully to see if it distinguishes between your leaving voluntarily and being dismissed (redundancy is a dismissal albeit by reason of redundancy). 

davethebb

Thank you GrumpyDil. I will look further into 2).

thebrexitunicorn

Hi Dave,
2) They should offer you a ‘suitable’ alternative role if one is available. They may believe that the lower salary would render the role unsuitable for you.  This should all be up for discussion as part of the consultation, if you want to raise questions. 

3) If they’re offering an enhanced payment in return for you concluding a settlement agreement why don’t you propose a waiver of this clause as part of the settlement. The clause itself may or may not be binding, but the easiest way to resolve the issue would be by agreement. 

davethebb

Thanks "thebexitunicom". Are they allowed to offer a lower salary for a position offered to me 18mths ago at more than twice the salary - this sounds and feels a bit iffy to me?
I assume that I should wait until they offer me an alternative role (or not) before I start reviewing "the offer"? In the meantime should I (or am I allowed) to request a breakdown of the financial offer they have made e.g. how the PILON is calculated and the enhanced offer and if so when is the best time to do this.
I have also read that if I announce that I have another job it "Locks In" their offer. Can someone help me and explain this process, why it locks in the offer and when it is best used (I assume after they have explored all possible roles?).

getmore4less

Should be a full breakdown of the offer and how each bit is calculated.
needed because some bits are taxable.

They should be open about what is on the table for both options staying and going.


Notice(worked, garden leave, PILON)
Redundancy payment  break down of the  method used  often a variation of the statutory  
Holiday

What are the pension arrangements there may be scope to do something there.

Definitely worth negotiating the restrictive clauses away as a good leaver.

Another angle  is the job and pay, how likely is it they can find someone to do it for that pay.
how important is it to the business.

p00hsticks

davethebb said:

Thanks "thebexitunicom". Are they allowed to offer a lower salary for a position offered to me 18mths ago at more than twice the salary - this sounds and feels a bit iffy to me?

I'm no expert, but the world is a very different place now than it was 18 months ago.

As long as they are paying the minimum wage, then I would imagine they can offer as low as salary as they can get away with and still manage to fill the role (or do without it).

thebrexitunicorn

davethebb said:

Thanks "thebexitunicom". Are they allowed to offer a lower salary for a position offered to me 18mths ago at more than twice the salary - this sounds and feels a bit iffy to me?
I assume that I should wait until they offer me an alternative role (or not) before I start reviewing "the offer"? In the meantime should I (or am I allowed) to request a breakdown of the financial offer they have made e.g. how the PILON is calculated and the enhanced offer and if so when is the best time to do this.
I have also read that if I announce that I have another job it "Locks In" their offer. Can someone help me and explain this process, why it locks in the offer and when it is best used (I assume after they have explored all possible roles?).

Hi Dave,
They can offer a lower salary, but if you’re not prepared to accept it you can tell them it’s not a suitable alternative. If it’s exactly the same role, just with a lower salary, then you might want to question this, because that suggests the job  itself isn’t redundant.    Have there been pay cuts across the board or is it just your role?  

Telling them you have another job doesn’t ‘lock in’ anything. At the moment you’re at risk, they haven’t served notice to end the employment.  I would not tell them if I secured alternative employment until the settlement agreement was finalised.  

I take it you aren’t in a union, if you are then that could be a good source of advice.  It might also be useful for you to consider what your preferred outcome is.  If the company can’t keep you on your current salary are you prepared to take a pay cut?  You could try to negotiate with them. Would they agree a temporary cut ? (If so make sure you have or put in writing what is agreed) . 

If your preference is to leave then the restrictions in the contract should be discussed and preferably waived. 

Good luck with the consultation, that should provide more clarity.  

  

Thrugelmir

davethebb said:

2) Can they rename my position and offer it at a greatly reduced salary and expect that I would apply (or do they have to offer it to me)?

Does your enhanced redundancy offer exceed any potential claim against the the company for constructive dismissal.  I suspect the objective is to remove you from the organisation. As by doing so they've identified considerable cost savings into the future. Employees are expendable ultimately when it comes to the long survival of the business. There's nothing personal in the management's actions, though it may feel that way. 

Is the reduced salary job offer negotiable. A few more years of guaranteed income and pension contributions may outweigh the complete loss of employment.

 I've known plenty of people who jump ship at the large sum on offer. Only to find decent permanent work is a struggle to find. 

Username03725

That stinks. 

It's the position that becomes redundant, not the employee. If this new role is identical in all but salary the company is acting illegally, but how you go about resolving that is a different question.

Part of the redundancy involves your current employer assisting you in finding a new job, either inside the company by consultation and assistance in identifying a suitable replacement role, or externally by allowing time for job applications and interviews. What constitutes a 'suitable' role is usually down to agreement between the two parties, but in prev exp it was made clear to me that even the smallest difference can be used to make it unsuitable. Reasons could include further to travel to the place of employment, different benefits (fewer holidays...) and lower salary. So in theory you shouldn't be in a position where you're forced to accept this as a suitable replacement role, but given that your employer appears to have little regard for the law or morality you may be on a sticky wicket there too.

Grumpy_chap

davethebb said:

I am a highly specialised engineer and after 27years of being employed by the same company I have been put on notice of pending redundancy as a cost cutting exercise. My employer has given me a enhanced settlement and a agreement to review. 

How generous is the agreement over-and-above statutory / contractual?  
Are you able to get other employment elsewhere easily enough?

The above two answers may well be sufficient to make it worth just going quietly and focusing on maximising the package. 
If that is your chosen route, you are in a strong position as the company are really only enhancing the package to pay for your signature on the Settlemenmt Agreement that you won't pursue a further claim.

davethebb said:

Although there are other redundancies in my company my letter from HR states that "due to my unique role, we do not propose to pool you with any other employees" My questions are;
1) Does the fact that I am not being pooled with other employees indicate that I have been singled out?

Is the statement that you are, effectively, in a "pool of one" correct?
If so, you are not being singled out.
The "redundancy pool" should really be a group of people that could all reasonably and probably transfer between roles - you might find a cleaner that also has the required skills of a specialised Engineer, but it is not likely.

davethebb said:

they have said that there will be a new position created (different name but duties the same as mine) but the salary is less than 50% of my current pay. 

2) Can they rename my position and offer it at a greatly reduced salary and expect that I would apply (or do they have to offer it to me)?

No, and yes.
Strictly speaking it is the position that is redundant and not the individual. 
Though a position can survive but not the individual, for example relocation, or specific business need.  You could ask what the business case is for the change of status.  
This is possibly academic as, if offered the role at 50% salary, would you accept?
Is your salary out-of-step with the market?
If your salary is market-rate, they won't be able to fill the role at a far lower salary.  Don't accept from the current employer something you would not accept from the open market.

davethebb said:

My existing employment contract restricts me from working for our competitors for 6 months 
3) Can the prevent me from working for 6 months. My industry is very small and my experience very limited so I would find it difficult (at 54yrs) to find a different position in a different industry.
Thank you in advance.

No - they cannot prevent you from working for 6 months (unless that is an express part of the Settlement Agreement - i.e. they pay you specifically for that on top of whatever other compensation they agree).
Non-compete clauses are common and rarely enforceable as they cannot be "restraint of trade" clauses in all but name.
Read the exact terms of the non-compete clause.  If too broad, not enforceable.  If written so that it could be enforced, then easy to manage viable work-arounds.



Key to your approach needs to be to understand whether you are currently remunerated at around the correct market-rate and whether you can obtain alternative employment within a reasonable time-frame.
What field of Engineering are you specialised in?  Some lines of work are booming at present.



I have been in exactly the same position as yourself in the past and took the view that if the company wants to pay me to not work for them, then happy days.