Monday, 16 February 2021 17:17

Brodies - The Legal View - Redundancy Part 2

Fiona Morrison

Welcome to Brodies - The Legal View, a regular column by Brodies LLP provided exclusively for Aberdeen Business News readers.

In my last column I looked at the obligation to consult employees who are at risk of redundancy. In this column I’m going to focus on suitable alternative employment. I’ll also mention some cost-cutting measures that are used by employers in order to avoid redundancies.

In a redundancy situation an employer must consider whether there is alternative work within the business that could be done by any of the employees who have been identified as being at risk of redundancy. This doesn’t mean creating new roles, however if there are vacancies within the business then employees potentially facing redundancy should be made aware of them. If the employees concerned are not attending work during the consultation period, the employer may want to ask for their personal email addresses so that the list of vacancies can be sent to them direct.

If an employee who is at risk of redundancy is offered an alternative position by their employer before they are made redundant, they will lose their right to a statutory redundancy payment if the role is suitable alternative employment and they unreasonably refuse the offer. In determining whether the position is suitable alternative employment, an employer will need to think about whether the employee has the right skills and experience for the new role and also the terms of the position including status, place of work, duties, pay, hours and responsibilities. Whether the employee unreasonably refuses an offer of suitable alternative employment will come down to whether they have “sound and justifiable” reasons for turning down the role. For example, if the alternative position is only for a very short period of time or if it involves a significantly longer and/or more expensive commute.

Remember also that if an employee on maternity leave is selected for redundancy, she is entitled to be offered any suitable alternative vacancy before it is offered to any other employee. This right will apply in a restructuring scenario where employees are slotted into new roles as well as in a traditional headcount reduction exercise. Failing to comply with this requirement would allow the employee on maternity leave to bring claims in the Employment Tribunal for automatic unfair dismissal and/or discrimination because of pregnancy and maternity.

Employers who are under pressure to reduce costs will often think about reducing headcount, given that employee-related costs are often one of the biggest items of expenditure for a business. However, we know from experience that market downturns are often short-lived and that recruiting talent when conditions improve can be costly. With that in mind, employers may want to consider whether a combination of the following would deliver the cost-saving required whilst preserving the permanent workforce:

 Implementing a recruitment freeze
 Offering new joiners the ability to defer their start date, possibly with the offer of compensation
 Reducing the number of non-permanent staff
 Seconding employees to other group companies or to clients/customers
 Offering employees the opportunity to take a period of unpaid leave
 Agreeing with employees to reduce their contractual hours as a temporary measure for a defined period of time
 Stopping all overtime so that employees only work their contractual hours
 Imposing a salary freeze or even salary cuts

Care needs to be taken when implementing many of these measures as the employer will be seeking to make changes to the terms and conditions on which staff are employed. However, providing employers are open and transparent about what the business is seeking to achieve and the cost-savings that can be made by implementing the proposed measures, employees may be more likely to agree to a variation to their contract if they recognise that doing so is necessary to protect the workforce.

For those of you who read my last column, I promised to keep you updated about the way in which redundancies at more than one site should be counted for collective consultation purposes. The latest on this is that the Advocate General has, in essence, confirmed the approach most lawyers and HR practitioners have taken in the past. This is to treat different sites as different establishments, meaning that it is not necessary to add up redundancies that are taking place at different sites when considering an employer’s collective consultation obligations. Unfortunately, however, the Advocate General’s opinion is not binding, so there will continue to be uncertainty in this area until the decision of the European Court of Justice is handed down later this year.

In the next column, my colleague Mark Stewart will be looking at inheritance tax planning for business owners anticipating the sale of their business.

Fiona Morrison is an associate in the Aberdeen employment team at Brodies LLP. For more information you can contact Fiona on 01224-392526 or at This email address is being protected from spambots. You need JavaScript enabled to view it..

If there are any topics you would like us to cover in future columns, please email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

The information in this article does not constitute any form of advice or recommendation by Brodies LLP and is not intended to be relied upon by you in making any specific decisions or taking (or refraining from taking) any action. If you wish us to give such advice, please contact the author.

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