NGCAA legal advice: Redundancy (part one)

In the first of two parts looking at how golf club employers should tackle the issue of redundancy, the NGCAA provides an overview, and explores the process, payments and additional considerations. Part two (next month), will look at the procedure.

With the state of the country’s finances in what some might call an uncertain state, we examine the law on redundancy so that golf club employers can understand the process and timelines now, just in case this later ends up being an option for cost saving. Whilst we hope that redundancies are not required, some key elements are set out below.

Importantly, please note that the guidance contained in this document is for a situation where the employer is proposing to dismiss fewer than 20 employees as redundant in any 90-day period.

Redundancy overview

A club may find that it needs to consider dismissals by reason of redundancy. There may be some employees within that consideration who have less than two years of service and hence would not normally have the protection of the unfair dismissal legislation. This article examines the situation for those with more than two years of service, but if a club has employees with shorter service, advice should be taken from the NGCAA as to how such employees may or may not fit into the process.

Redundancy is a potentially fair reason for dismissal in accordance with the Employment Rights Act 1996.

A potential redundancy situation arises where employees are at risk of dismissal because of one of the following:

• A business closure (closure of the club altogether);

• A workplace closure (closure of one of several sites, or relocation to a new site); or

• A diminished requirement of the business for employees to do work of a particular kind (a reduced requirement for employees with certain functions / duties in the club).

Redundancies may arise for a variety of reasons, including, for example:

• Recession or other economic pressures making business closure or reduction in staff numbers necessary;

• Changes in the nature of services provided;

• Internal reorganisation to make more efficient use of roles and duties; or

• Technological developments resulting in change to some or all job functions.

The club should clearly identify its rationale and business reasons for the need to make redundancies, known as ‘the business case’.

Employees who are dismissed by reason of redundancy may be entitled to a statutory redundancy payment and they may be able to challenge the termination of their employment as an unfair dismissal. Further information is set out in this two-part feature.

Process

Redundancy dismissals should follow a fair procedure incorporating factors including:

• warning employees they are at risk of redundancy;

• holding a series of consultation meetings with employees;

• allowing employees to be accompanied at those meetings;

• considering representations made by employees;

• considering alternatives to dismissal;

• giving proper notice of dismissal; and

• giving the employee the right to appeal.

The length of the process will vary depending upon the complexity of the redundancy situation, but where, say, only one individual post is at risk of redundancy, it is generally recommended that the process should last at least two weeks and involve a series of at least three consultation meetings.

The process should be properly documented and retained including selection criteria and employee score sheets, written invitation letters to meetings, notes of meetings and follow-up letters.
Please contact the NGCAA for additional information regarding the redundancy process.

Redundancy payment

An employee with two or more years’ continuous service is entitled to a statutory redundancy payment. In addition, if the club operates any enhanced redundancy scheme or benefits, any entitlement to those.

Calculation of a statutory redundancy payment depends on the employee’s age, length of service and salary. It is calculated by first determining the period for which the employee has been continuously employed and allowing a week’s pay for each complete year of service, with a further potential multiplier added depending on the employee’s age. A week’s pay is subject to a maximum capped amount

Statutory redundancy payments can be calculated online at the government website.

Additional considerations

Automatically unfair redundancy dismissals: certain dismissals may amount to automatic unfair redundancy (such as selection connected to pregnancy or childbirth, whistleblowing or asserting a statutory right). For a selection of automatic unfair dismissal cases, employees do not need a qualifying period of employment to make a claim to the Employment Tribunal, so clubs must take advice if in doubt.

Discrimination: selection criteria may discriminate against employees either directly and / or indirectly. Any redundancy selection criteria that discriminates directly on any of the protected characteristics (sex, maternity or pregnancy, marital status or civil partnership, age, race, disability, sexual orientation, gender reassignment, or religion or belief), or on grounds of fixed-term or part-time status, will generally result in a finding that a dismissal is unfair (in addition to a finding of unlawful discrimination). Criteria that have an indirectly discriminatory effect are also likely to render dismissals unfair if the employer is unable to demonstrate an objective justification for the adoption of such criteria.

If a club is considering dismissals by reason of redundancy, or would like advice on any other legal matter, please contact Alistair Smith of the NGCAA on 01886812943 or office@ngcaa.co.uk