Law and Labour » Redundancy

Employment Rights Bill update

Law and Labour — Sun, 23 Mar 2025 12:20:27 +0000

The Employment Rights Bill will bring sweeping changes to many areas of employment law once its provisions come into force. Its reforms will affect unfair dismissal, flexible working, statutory sick pay (SSP), family leave, fire and rehire, zero hours contracts and trade union law.

Between October and December 2024, the government consulted on four areas of the Bill: zero hours contracts, fire and rehire, trade unions and SSP. In March 2025, the government published its response to those consultations and also announced a series of amendments to the Bill.

The amendments include:

Zero hours contracts – the right to request contracts with guaranteed hours will apply to agency workers. Employers will have a duty to provide workers with a range of information about their right to guaranteed hours. Flexible working – there will be a new requirement for any refusal of a flexible working request on one of the statutory grounds to be reasonable. Employers will also have to explain their reason for refusal. SSP – low paid workers will no longer need to earn above the lower earnings limit to qualify for SSP. They will receive either 80% of their average weekly earnings or the current rate of SSP, whichever is lower. SSP will be payable from the first day of sickness absence. Workplace harassment – employers will have a duty to take all reasonable steps to prevent harassment of their employees by third parties. Employers could face civil claims for harassment where they have failed to take such steps. Redundancy collective consultation – the maximum period of the protective award will increase from 90 days to 180 days. Trade unions – there will be a series of changes to trade union and strike rules, such as changing the current notice period for industrial action from 7 to 10 days. Industrial action mandates will expire after 12 months instead of after 6 months.

We continue to monitor for further amendments.

Photograph: “people-400818_1280”.

P&O Ferries: was firing 800 staff unlawful?

Law and Labour — Sat, 19 Mar 2022 10:54:57 +0000

On 17 March 2022, the management of P&O Ferries announced by video call to 800 workers that their employment was to be terminated with immediate effect. Many are stunned that a major British employer could fire so many employees at will. However, there are potential legal consequences to P&O Ferries’ actions.

Under UK employment law, an employer needs a fair reason in order to dismiss an employee. It is unclear what reason P&O is likely to rely upon to justify the sackings. The company reportedly said the sackings were necessary “to reduce our crewing costs by 50 per cent, secure the future of our business and set it up for growth”.

One reason P&O Ferries might rely on is redundancy. This reason is appropriate where dismissal is due to a need to reduce headcount. However, P&O Ferries could struggle to prove that this was a genuine redundancy situation. It does not appear that staff numbers are being reduced; the main motivation appears to be reduction of staffing costs.

Alternatively, P&O Ferries could rely on the catch-all category of “some other substantial reason” (SOSR). This reason is typically used by employers where the reason for dismissal does not align neatly with one of the other legally accepted reasons for dismissal.

Whatever reason is chosen an employer must follow a fair procedure when dismissing staff. The appropriate procedure to follow depends on the reason for dismissal. With either redundancy or SOSR, a fair process involves consulting with employees prior to their dismissal. Given the swift manner in which the dismissals took place, no form of consultation seems to have occurred.

Without a fair reason or a fair procedure being followed prior to dismissal, P&O Ferries may find itself facing claims of unfair dismissal in the employment tribunal. However, those are not the only claims it could potentially face.

Where 100 employees or more are facing dismissal, an employer is legally required to take certain steps under collective consultation legislation. These include consulting collectively with employees at least 45 days before the date of the first dismissal. The penalty for not engaging in collective consultation is a protective award for each employee of up to 90 days’ gross pay. This is one of the most expensive liabilities an employer may face in employment law.

Another requirement is the need to notify the Secretary of State of the Department for Business, Energy and Industrial Strategy (BEIS) of the planned dismissals. The notification must be sent to BEIS at least 45 days before the first dismissal. Failure to do so is a criminal offence punishable by a fine. According to reports, the Government only learnt of the planned dismissals the night before the P&O Ferries announcement. The company’s directors could face criminal proceedings for failing to comply with the collective consultation obligations.

According to reports, P&O Ferries has offered its employees severance packages containing enhanced redundancy payments. These are likely being offered as a means of staving off claims for unfair dismissal and failure to carry out collective consultation. However, the company cannot dispel the potential criminal charges the company [...]

Coronavirus job retention scheme announced

Law and Labour — Sun, 22 Mar 2020 12:27:04 +0000

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access financial support to continue paying part of their employees’ salaries for those employees who would otherwise have been laid off or made redundant during the coronavirus pandemic. The Government intends that the scheme will run for at least 3 months from 1 March 2020, but it may be extended if necessary.

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. This is broadly median national salary. Employers can choose to fund the difference between this amount and an employee’s full salary, but there is no need to do so.

All UK businesses will be eligible to participate in the scheme. This includes not only limited companies but also LLPs, partnerships and charities.

Employers will need to:

Designate affected employees as ‘furloughed workers’, and notify employees of this change. Changing the status of employees remains subject to existing employment law. This means an employer will need to agree with an employee that they’re going to become a furloughed worker and also decide upon the appropriate pay. It’s likely employees will agree to this if the alternatives are being made redundant or being sent home without pay. Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. HMRC is working urgently to set up a system for reimbursement as its existing systems are not set up to facilitate payments to employers. When the portal is set up, HMRC will set out further details on the information required.

Employees should not undertake any work for their employer while on furlough. The employee will still be eligible for additional forms of support, including Universal Credit.

We’ll update this page as further details about the scheme become available.

Photograph: “Computer on minimal desk” by Startup Stock Photos

Xerox employee’s job did not transfer to the Philippines

Law and Labour — Sun, 01 Oct 2017 08:59:09 +0000

Generally, the fact that one’s work is being transferred overseas is enough to make an employee object to the transfer. But in the case of Xerox v Zeb, the employee decided that he was willing to relocate from Wakefield in the UK to Manila in the Philippines. The question was whether he was entitled to transfer with his UK terms and conditions of employment preserved.

Background

Mr Zeb worked in the Finance Accounting team at Xerox in Wakefield. In 2014, Xerox decided to move the services carried out by his team offshore to Manila. The transfer of services was covered by the transfer of undertakings legislation (TUPE). The affected staff were given a choice of either objecting to the transfer, in which case they would receive an enhanced redundancy package, or not objecting, in which case they would receive statutory redundancy pay only.

Mr Zeb chose not to object to the transfer. He argued that under TUPE he was entitled to transfer to Manila on his UK terms and conditions of employment. These were much more favourable than the local terms and conditions on offer for the job, therefore Xerox (who was hoping to make cost savings by moving the jobs offshore) disagreed. Xerox dismissed Mr Zeb in October 2014 and paid him statutory redundancy.

The claim

Mr Zeb complained that he had been unfairly dismissed. He argued that redundancy was not the real reason for his dismissal, but, if it was, Xerox had failed to follow the correct procedure before making him redundant. The Employment Tribunal agreed with Mr Zeb that redundancy had not been the real reason for his dismissal. It further found that his contract had been varied under TUPE and he was entitled to work in the Philippines under his UK terms and conditions. Xerox appealed the Tribunal’s decision.

Appeal decision

The Employment Appeal Tribunal (EAT) disagreed with the Tribunal’s judgment. It found that Mr Zeb’s employment contract had not been varied because the parties had not agreed as to the proposed change to his terms. Mr Zeb wanted to changed his place of work to Manila, but retain his remaining UK terms, while Xerox would only accept his relocation to Manila if he was employed under the same terms as local staff. No agreement had been reached and the contract could not be varied unilaterally, therefore Mr Zeb’s contract had not been varied.

The EAT also found that the Tribunal had erred when considering the reason for dismissal as the judge had failed to apply the requisite test for redundancy dismissals correctly. The EAT found that the Tribunal should have focused on the reason for Mr Zeb’s job being terminated, and not why Xerox had refused to employ him offshore. A further error was the Tribunal’s failure to consider Regulation 7 of TUPE which covered transfer-related dismissals.

In conclusion, the EAT allowed Xerox’s appeal and remitted the case to a new Tribunal for reconsideration.

CASE Xerox Business Services Philippines Inc Ltd v Mr J Zeb, Employment Appeal Tribunal, 24 July 2017

Photograph: “White Beach, Boracay, Philippines” used under Creative Commons CC0 1.0 licence

How might Brexit affect employment law?

Law and Labour — Sun, 15 May 2016 10:26:02 +0000

On 23 June 2016, a referendum will be held in the United Kingdom to decide whether this territory should leave the European Union (‘Brexit’). If Brexit were to take place, this development could have a significant impact on employment law.

Much of the legislation relating to employment rights has its foundation in European law. In addition, UK courts have to abide by the decisions of the European Court of Justice when interpreting any employment law that has its basis in EU law.

In the table below, we summarise which areas of law are likely to change.

Area of law Likely to change? Reasons Equality No It would be difficult to get rid of the existing law in this area. Working time and holiday pay Yes Workers and trade unions would complain if too many changes were made to their rights in this area. However, the law relating to holiday pay might be amended to simplify its application and clarify some unpopular rights that have arisen as the result of EU case law. Transfer of undertakings (TUPE) No Although the law in this area is unpopular with businesses, it is unlikely to be repealed because it is a key part of many commercial agreements. Instead, minor amendments might be made. Redundancy No The obligations are not onerous such that removal would be sought. Agency workers Yes The law governing agency workers’ rights is complex and unpopular, making it ripe for amendment. Immigration Yes If Brexit goes ahead, then nationals of the UK and the EU will lose the right to freedom of movement between each others’ states. It is likely the Government would put in place transitional arrangements allowing EU nationals already working in the UK to remain for a time as long as reciprocal arrangements applied to UK citizens working in EU countries. Data protection No EU states will demand that the UK have adequate data protection measures in place should their businesses need to transfer personal data to the UK. Maintaining the current legislation will provide such security, but the legislation will need to be updated to take into account upcoming changes to EU data protection legislation.

Despite the concerns noted above, any changes are unlikely to take place immediately following Brexit. The rules governing EU membership mean it will take two years for the UK to leave the EU. The Government would therefore be more likely to retain current legislation for a period of time before making changes to individual legislation on a piecemeal basis as and when necessary.

“European Union flag” by Flikr user Yanni Koutsomitis used under Creative Commons Attribution 2.0 license