Navigating voluntary severance and restructures

Amid escalating costs pressures and a decline in public funding, educational institutions across Scotland and the UK may be considering operating voluntary severance schemes and restructuring.

However, a common misconception is that a redundancy requires the organisation to be performing poorly or that the entire role is not needed. Ultimately, redundancies may be appropriate to operate effectively and to safeguard the organisation’s long-term future.

Advising on voluntary severance and redundancy processes

While redundancy constitutes one of the potentially fair reasons for dismissal, employers must ensure a fair process is undertaken. Even voluntary redundancy constitutes a dismissal under the law, and a claim can be brought by an employee therefore necessitating caution.

Advice may be required on the options and, in particular, on age discrimination concerns that apply when strain cost is taken into account in the approval of application, or in what figures should be paid. An age discrimination claim can lead to an employer having to pay for unlimited compensation.

Whether there is discrimination depends on the reasons why the employer is using age as a factor to calculate the value of the payment. Direct age discrimination can be justified if the employer can show that the measure in question is a proportionate means of achieving a legitimate aim.

A failure to adhere to the statutory requirements for collective consultation could result in an employee or group of employees being entitled to a protective award of up to 90 days’ gross pay each. A failure to handle the process fairly can give rise to various types of Tribunal claims and award.

Settlement agreements for redundancy

When making redundancies, it’s often sensible to offer employees settlement agreements to avoid the potential risk of employment claims.

Anderson Strathern can advise on creating settlement agreements and assist with settlement negotiations with employees where required, to help ensure a smooth transition during this challenging period.

Other options to consider

There may be several ways to avoid redundancies.

Negotiating reduced pay or hours remains possible. Staff may be laid off so rather than entirely redundant, they are put on unpaid leave. What can be done will depend on the contract.

Additionally, exploring options such as mergers, outsourcing services and sharing resources might save costs. However, these strategies need to be handled carefully to avoid breaches of employees’ rights from a relevant transfer. There are important considerations for all parties involved and it is essential that the relevant responsibilities are thought through and dealt with from the outset. Both the outgoing employer and the new employer may need to inform and (if appropriate) consult with representatives in relation to any of their employees who may be affected by the transfer, or risk having to pay a sum up to 13 weeks’ gross pay for each affected employee.

If resources are stretched, you may wish to consider the use of Anderson Strathern’s team of HR Business Partners who can plug the gap providing on the ground, hands on practical support to navigate these complex challenges effectively.

If this has affected your organisation, and you are needing support, get in touch with Robin Turnbull or your regular Anderson Strathern contact.

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