Redundancy and reorganisation


Introduction

Redundancy is a type of dismissal when a role or position is no longer required. It may occur:
  • when there is a closure of business for which the employee was employed
  • when there is a closure of a workplace where the employee was employed to work
  • when the requirements for employees to carry out work of a particular kind have, or are expected to, cease or diminish 
A redundancy situation can arise following a reorganisation or restructure, although not all organisational change will amount to a redundancy situation. 
 
A reorganisation or restructuring may also affect your: 
  • shift pattern
  • work location
  • grade or job role
  • pay 
  • numbers of roles, such as a reduction in senior staff
  • other changes to your terms and conditions.   

If changes to your contract are being made as part of a reorganisation, you can also read our guidance on contracts. If the only proposed change is to your shifts, please see our changes to your shifts advice guide. 

It is important that you contact us for advice if you are notified of any redundancy or reorganisation proposals. Redundancy should be a last resort after all other options have been considered. 

In all cases:

  • get a copy of and read your contract
  • read your employer’s local policy
  • keep copies of all documentation relating to the proposed changes.

If you have been told that you are being made redundant it is also important that you:

In any reorganisation or redundancy process a meaningful consultation should take placeusually this is through group and one to one meetings

An individual consultation is recommended in all cases of redundancy. Your employer should explain why the redundancies are necessary. Collective or group consultation is a statutory requirement where there are at least 20 staff to be made redundant from one establishment. The employer must also start consulting with a recognised union, if there is one, or start a process of electing employee representatives.

Failure to consult with employees may make any subsequent dismissals unfair and in certain circumstances may lead to a claim to an employment tribunal for compensation.

Please read our Redundancy and reorganisation: one-to-one meeting checklist. Please also contact us for advice. 

It is good practice for employers to offer employees the right to be accompanied to one to one meetings where they are proposing service reconfiguration, redundancies or transfers. However, there is no automatic right to accompaniment or for trade union representation, unless your employer's policy allows for this.

Remember, to have our support, you need to be in membership at the time of the notification of reconfiguration, redundancy or transfer. 

Please read our 'Redundancy and reorganisation: one-to-one meeting checklist' and members can contact us for advice.

Redeployment may occur as part of a redundancy process or it may follow restructuring. Your employer may have a redeployment policy which you should obtain and read

If redeployment is part of a redundancy process, organisations are required to take reasonable steps to redeploy at risk employees to 'suitable alternative employment'. For information on how employers determine who is ‘at risk’ see the section on redundancy belowAt risk employees should be considered for vacancies in preference to external candidates or other employees who are not at riskThere is no obligation to create new vacanciesIf an at risk employee is the only suitable at risk candidate for a vacancy, the role can be offered without any formal assessment. Any recruitment process must be a fair one.

Whether an alternative role is ‘suitable alternative employment’ depends upon a number of factors, including how similar work is to the current role, terms of employment, pay, status hours and location. 

Re-banding

If you are likely to be re-banded, please read our ‘Redundancy and reorganisation: one-to-one meeting checklist'.

If you are redeployed into another role your pay may be affected. However, as pay is one of the determining factors in whether you have been offered suitable alternative work, it is possible that your pay in the new role will be protected for a specified period of time and some employers will have pay protection policies.

If you work within the NHS, Annex 15 of the NHS Agenda for Change terms and conditions of service handbook states that pay protection be agreed locally. You will able to request access to your employer's local policy on pay protection . If you are employed outside of the NHS pay protection will be in accordance with your contract of employment, local policy, and negotiation.

If you are employed outside of the NHS any pay protection will be in accordance with your contract of employment, local policy and negotiation. If you are concerned, contact us for advice.

If you unreasonably refuse an offer of ‘suitable alternative’ employment, you will not be eligible for a redundancy payment. You should not turn down an offer without taking advice from us. We recommend that you also read your employer’s organisational change policy or, if you are employed  under Agenda for Change terms and conditions, you should also check the NHS Agenda for Change terms and conditions of service handbook section 16.21 to 16.23 (England) and section 16.18 to 16.20 (Scotland, Wales and NI). Under these sections, the right to a contractual redundancy payment will also be lost, if you refuse to apply for suitable alternative employment that has been reasonably brought to your attention.        

An offer of suitable alternative work should be made to you prior to the expiry of your notice period. It may also provide a trial period and this is mandatory when the alternative work differs from the existing job. You must always seek advice from us before accepting any 'extended' trial periods as you could be deemed to have accepted a variation of your contract and lose any protection and redundancy payment. 

Contact us immediately (before the end of the four week trial period), if you wish to challenge the redeployment. If you can successfully argue that the offer of alternative employment is not suitable or, if it is suitable, that your refusal is reasonable regardless, e.g. you have a good reasons to reject a suitable offer, then you will still receive redundancy pay if you are made redundant. If there is no suitable alternative work available and you cannot be redeployed, you will be made redundant. 

If your employer is changing from one service provider to another, your existing employment contract could be protected under the Transfer of Undertakings (Protection of Employment) Regulations 2006, as amended by the Collective Redundancies and Transfer of Undertaking (Protection of Employment) (Amendment) Regulations 2014, known as ‘TUPE’. Read more about TUPE.

The employer has to select fairly for redundancy. Your employer should:

  • warn those staff who are at risk
  • identify the ‘pool for selection’ of at risk staff
  • consult with individuals, including why redundancies are proposed, how many, the selection process and criteria, consider comments on the criteria  
  • apply proper selection criteria to those in the pool which is, as far as possible, objective and capable of verification 
  • inform staff of their scores and allow those selected to challenge them
  • consider suitable alternative employment subject to a trial period.

Where possible the above should be with the agreement of local trade unions.

The existence of objective selection criteria should ensure that employees are not unfairly selected for redundancy. Examples of selection criteria most commonly used by employers when selecting employees for redundancy are as follows:
  • attendance record
  • length of service
  • experience and capability performance
  • skills and knowledge
  • disciplinary record
  • ‘last in, first out’ (but only if used as part of a balanced set of criteria).

Whichever are chosen, they must be fair and consistently and objectively applied. Some subjective criteria maybe used if applied in this way. 

The redundancy will be automatically unfair in certain circumstances and detailed information on this can be found in the ACAS redundancy guide. Please also see our information on discrimination. If you feel that your employer has selected you unfairly, you should appeal against the decision using your local appeals process. You may be able to make a claim to an employment tribunal for unfair dismissal and possibly unlawful discrimination. Please contact us for advice.

Your employer should calculate your redundancy pay for you. You should check your contract of employment and terms and conditions which will identify any contractual redundancy arrangements. If you are not entitled to contractual redundancy pay, you may be eligible for statutory redundancy pay.

For NHS staff, the calculations are outlined in section 16 of the NHS terms and conditions of service handbook and staff who qualify maybe able to take their NHS pension early, as an alternative to a redundancy payment. In the first instance, please contact your pension provider for more information and see our pensions guidance, as the rules for early retirement are complex and differ between England and Wales/Scotland/NI.   

If an NHS employer refuses you a redundancy payment, or you disagree with their calculation, you must raise a grievance. In order to make a claim for a redundancy payment or retirement on the grounds of redundancy, ensure you comply with the requirements set out in section 16.26 (England) and section 16.23 (Wales, Scotland and NI). Please contact us for advice.       

The length of notice required should be specified in your contract or local policy, subject to statutory minimum notice periods.

In an effort to minimise the number of compulsory redundancies, organisations may invite volunteers for redundancy. There is no guarantee that an application for voluntary redundancy will be accepted. Your employer may still wish to undertake a selection process to ensure they do not lose invaluable skills or knowledge.

Before agreeing to volunteer, always ensure that your redundancy package is calculated correctly and that your employer will give you a letter confirming you are redundant, should your application be accepted. Please contact us if you would like to discuss this further or if you would like to obtain careers advice.

The purpose of a severance scheme is to allow staff to leave voluntarily in return for a severance payment. Your employer cannot force you to resign under a severance scheme.

If you work in the NHS in England, the 'mutually agreed resignation scheme' or MARS, is a voluntary scheme that allows staff to resign in return for a severance payment thereby creating vacancies for staff who require redeployment. This scheme should not be used in a situation where your post is at risk of redundancy. The MARS scheme is outlined in section 20 of the NHS terms and conditions of service handbook. Other NHS severance schemes apply outside of England. For example, the “voluntary early release scheme” or VERS, in Wales.  

It is a big decision to agree to a severance scheme. It is important to contact us before making any decisions or responding to your employer. If you are resigning under a severance scheme, the arrangements of your settlement should be covered by a written settlement agreement. This should be checked by the RCN before you sign it, please contact us for further advice.

Please note: if you leave under such a scheme, you may be seen to have resigned rather than being dismissed. This could affect any application for state unemployment benefits.

Your employer must allow you reasonable time off work to look for another job or to make arrangements for re-training, provided you have been continuously employed for two years by the date your notice expires. There is no limit to how much time off is reasonable; this depends on your circumstances.

Legally, your employer only has to pay you up to two-fifths of a week’s pay for this time off, although local policy may allow for more than this. Your employer may allow you to work back the time on a different day, but they don’t have to do this. You may wish to consider taking annual leave rather than losing pay.

If you require any careers advice, please see the comprehensive information provided by our careers service.

If you find another job outside the NHS, this will not generally impact on your redundancy payment entitlement. You will only need to consider the notice period, which you may be obliged to work for your current employer although an NHS employer can agree to early release during a notice period were the conditions in section 16 of the NHS Terms and Conditions of Service are met.

If your new job is within the NHS and you start the job within four weeks of the termination of your contract, you may forfeit your redundancy pay. Please contact us for further advice.

If you require any careers advice, please see guidance from our careers service.

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Page last updated - 03/09/2021