There has been a marked increase over the past number of days of Companies offering Redundancy packages to their employees. AIB & Bank of Ireland recently announced details of their long awaiting voluntary redundancy packages and are offering three weeks pay per year of service in addition to the Statutory entitlement of two weeks pay per year of service and a bonus week on top. Although not a voluntary redundancy matter the Vita Cortex case is now at a close.
And also Ulster Bank have recently announced that they are over subscribed to their Voluntary redundancy scheme, with over 1,100 applications for 950 places. There are definitive benefits to a Voluntary redundancy package for an Employer however what happens if the wrong people apply for Voluntary Redundancy?
The benefits of any such package for an Employer are numerous with the liability of a formal consultation process severely lessened and the threat of a claim for unfair selection for redundancy decreased as a result. However the headaches for an employer can arise if the wrong people apply for a redundancy, employees with the skills and competencies that an employer does not wish to lose.
In any redundancy process the need for consultation is paramount with a litany of case-law backing this up. Cases such as Barton v Newsfast Freight Ltd. (UD 1269/2005), Mugford -v- Midland Bank Plc. [1977] IRLR 209, and Freud -v- Bentalls Ltd [1982] IRLR 443 all espouse the requirement to engage in consultation with an employee to avoid a redundancy being automatically deemed unfair. Voluntary redundancy scenarios are no different in this regard with a group consultation necessary with details provided of the package and proposals being offered.
It should also be noted at this point that the Company will reserve the right to refuse requests for voluntary redundancy in order to guarantee the retention of the core skills and competencies for the Company. this essentially will avoid a scenario where all the supervisory or specialist people in a Company leave and the Company is left with no one to carry out key roles in the business. AIB have said it is not offering voluntary severance to staff in its commercial and corporate banking, corporate finance, transformation and internal audit divisions. This is a practical example of the restriction of the voluntary redudnancy packages.
The offer of Voluntary Redundancy is just that, an offer, there is no obligation on an employee to request any such offer and there is no obligation on the employer to accept any such request.
Before considering any request for voluntary redundancy an employer should require an employee submit this in writing, firstly to provide a record of the request and secondly if dealing with large numbers to provide administrative back up of the requests. Once the requests have been received the Company should endeavour to meet with all staff individually who have requested voluntary redundancy.
In the event of a key employee requesting redundancy they should be informed as to the reasons why the company cannot accept their request and the Company should formalise this in writing. With employees who the Company have accepted their request the Company should also formalise this in writing as this paper trail allows any potential third-party to see exactly the process followed and avoid any ambiguity in the process.
The comeback for an employee is minimal in relation to this as firstly it is difficult for an employee to maintain they were treated unfairly by not being allowed take voluntary redundancy, as they have managed to retain their job. Secondly and employees claim for unfair selection for redundancy cannot be well founded if they formally put in a request for voluntary redundancy.
Voluntary redundancy is a useful tool for Employers as the need for a formal consultation process (which in some instances requires 30 days) is avoided, however the key to the process is to ensure that proper records are retained and the process is formalised throughout.
There has been a marked increase over the past number of days of Companies offering Redundancy packages to their employees. AIB & Bank of Ireland recently announced details of their long awaiting voluntary redundancy packages and are offering three weeks pay per year of service in addition to the Statutory entitlement of two weeks pay per year of service and a bonus week on top. Although not a voluntary redundancy matter the Vita Cortex case is now at a close.
And also Ulster Bank have recently announced that they are over subscribed to their Voluntary redundancy scheme, with over 1,100 applications for 950 places. There are definitive benefits to a Voluntary redundancy package for an Employer however what happens if the wrong people apply for Voluntary Redundancy?
The benefits of any such package for an Employer are numerous with the liability of a formal consultation process severely lessened and the threat of a claim for unfair selection for redundancy decreased as a result. However the headaches for an employer can arise if the wrong people apply for a redundancy, employees with the skills and competencies that an employer does not wish to lose.
In any redundancy process the need for consultation is paramount with a litany of case-law backing this up. Cases such as Barton v Newsfast Freight Ltd. (UD 1269/2005), Mugford -v- Midland Bank Plc. [1977] IRLR 209, and Freud -v- Bentalls Ltd [1982] IRLR 443 all espouse the requirement to engage in consultation with an employee to avoid a redundancy being automatically deemed unfair. Voluntary redundancy scenarios are no different in this regard with a group consultation necessary with details provided of the package and proposals being offered.
It should also be noted at this point that the Company will reserve the right to refuse requests for voluntary redundancy in order to guarantee the retention of the core skills and competencies for the Company. this essentially will avoid a scenario where all the supervisory or specialist people in a Company leave and the Company is left with no one to carry out key roles in the business. AIB have said it is not offering voluntary severance to staff in its commercial and corporate banking, corporate finance, transformation and internal audit divisions. This is a practical example of the restriction of the voluntary redudnancy packages.
The offer of Voluntary Redundancy is just that, an offer, there is no obligation on an employee to request any such offer and there is no obligation on the employer to accept any such request.
Before considering any request for voluntary redundancy an employer should require an employee submit this in writing, firstly to provide a record of the request and secondly if dealing with large numbers to provide administrative back up of the requests. Once the requests have been received the Company should endeavour to meet with all staff individually who have requested voluntary redundancy.
In the event of a key employee requesting redundancy they should be informed as to the reasons why the company cannot accept their request and the Company should formalise this in writing. With employees who the Company have accepted their request the Company should also formalise this in writing as this paper trail allows any potential third-party to see exactly the process followed and avoid any ambiguity in the process.
The comeback for an employee is minimal in relation to this as firstly it is difficult for an employee to maintain they were treated unfairly by not being allowed take voluntary redundancy, as they have managed to retain their job. Secondly and employees claim for unfair selection for redundancy cannot be well founded if they formally put in a request for voluntary redundancy.
Voluntary redundancy is a useful tool for Employers as the need for a formal consultation process (which in some instances requires 30 days) is avoided, however the key to the process is to ensure that proper records are retained and the process is formalised throughout.
