Redundancy Policy

12 Jun 2014 Alex Hastings    Last updated: 5 Jul 2014

This article outlines NICVA’s policy regarding redundancy.

Policy statement

NICVA notes under the Employment Rights (Northern Ireland) Order 1996, redundancy arises when employees are dismissed because:

  • the employer has stopped, or plans to stop, carrying on the business for the purpose which the employee was employed for;
  • the employer has stopped, or plans to stop, carrying on the business in the place where the employee was employed;
  • the business no longer needs as many employees to carry out particular kinds of work, or this is likely to be the case in the future;
  • the business no longer needs as many employees to carry out particular kinds of work in the place where the employees were employed, or this is likely to be the case in the future.

For the purposes of the right to Collective Consultation, which applies when an employer proposes to make 20 or more employees redundant over 90 days or less, the law defines redundancy as:

‘dismissal for a reason not related to the individual concerned or for a number of reasons all of which are not so related.” This definition might include for example, a situation where dismissals are not related to conduct or capability of the individuals but are part of a reorganisation where there is no reduction in the overall numbers employed because the employer has recruited new staff’.

A redundancy situation may arise in NICVA because:

  • The financial circumstances of NICVA necessitate a reduction in the number of jobs or there maybe a reduction or loss of funding for a particular post and as a direct result it is no longer financially viable for NICVA to maintain the post holder’s employment.
  • The particular kind of work for which an employee or employees was/were originally recruited has stopped or is expected to stop.
  • Changes in working methods or service provision mean that a job or jobs no longer exist.

The dismissal of an employee on grounds of unsuitability or inefficiency does not constitute redundancy and would follow such procedures as are prescribed in the existing disciplinary procedure.

Restructuring and redundancy

NICVA recognises there may in the future be, changes in the working of the organisation, its finances/funding or new organisational requirements which may make restructuring and redundancies unavoidable.

For example, a reduction in core funding could necessitate a restructuring of the organisation to reflect the loss of income, and as a consequence a number of posts could be declared redundant. In such a situation, existing services would be re-evaluated and subsequently decisions maybe made in terms of a current service stopping or being reduced in scale. The Resources Committee would be responsible for making any such decisions which could lead to redundancies.

The Resources Committee will keep under review possible future developments which might affect the number of employees required and will as far as possible plan to avoid redundancies.

Objectives

It is the overall objective of NICVA to maintain suitability of employment / job security within NICVA consistent with efficient operation and financial viability.

The specific objectives of this redundancy policy and the procedures which will be used to effect it are as follows:

  • To ensure as far as possible that employees who may be affected by the discontinuance of their particular jobs are given fair and equitable treatment.
  • To ensure that minimum disruption is caused to employees and to NICVA.
  • To ensure that as far as possible changes are effected with the complete understanding and agreement of the employees concerned and SIPTU or the recognised union at the time which NICVA recognises as solely representing the interests of all employees (whether or not they are members of that union).

Equal opportunities

As an equal opportunities employer, NICVA will have due regard for the principles of the Equal Opportunities Policy when devising redundancy arrangements.

Principles

As soon as the possibility of redundancy occurs, a Redundancy Consultative Group will be established composed of members of NICVA’s Resources Committee along with representatives of Unison or the recognised union at the time.

NICVA will use its best endeavours to:

Absorb redundancy through natural wastage such as:

  • Achieving a reduction in numbers by not replacing those who leave
  • Looking for people to take early retirement or voluntary redundancy

Find suitable alternative employment within NICVA for employees who might be affected by redundancy though not necessarily on terms and conditions as favourable as those which have previously applied to the persons affected.

Give the maximum possible warning of pending redundancy to individuals likely to be affected in addition to the statutory period of notice. The additional warning period will, if practicable, be not less than four weeks.

In circumstances where it is known that redundancy will occur and that suitable alternative employment within NICVA cannot be found, the facts which will be taken into account in deciding who should be made redundant will include:

Qualifications, skills and experience in relation to NICVA’s strategic and operational requirements both current and future.

The standard of work performance or aptitude for work as evidenced in previous performance appraisals.

Live disciplinary records.

NICVA does not operate a LIFO policy of redundancy selection in isolation. However, length of service will be taken in to account in redundancy selection and preferably only in a tie break situation. The legitimate aim being the reward of loyalty and overall desirability of achieving a stable work force in the context of a fair process of redundancy selection.

Attendance Records - Absence records will be reviewed, except for those related to disability, pregnancy, maternity and paternity, dependants, special leave. The review will take into account:

  • reasons for absence
  • number of absence occurrences.

It should be noted that to avoid direct or indirect discrimination in selection for redundancy, NICVA will use a number of criteria. No one criterion will be used in isolation.

Procedures

The procedure for dealing with employees who are at risk of redundancy will be as follows:
Review of NICVA’s requirements

The Resources Committee will keep under review possible future developments which might affect the number of employees required and will as far as possible plan to avoid redundancies.

Measures to avoid redundancy

Examples of measures which may be considered are:

  • Savings in NICVA expenditure other than staffing costs
  • Achieving a reduction in numbers by not replacing those who leave
  • Voluntary retirement
  • Employees volunteering to become redundant
  • Savings affected by temporary salary cuts for all employees, subject to Union agreement
  • Job sharing
  • Short-time working

An offer of voluntary retirement must be instigated by the employee, and will be considered:

  • Only in circumstances where the Redundancy Consultative Group is satisfied that such an offer would be in the best interests of the employee and of NICVA.
  • On the basis that NICVA will endeavour to compensate any employee concerned as generously as its resources will permit.

Where an employee volunteers to become redundant, NICVA will have the right to decline to accept such an offer on grounds that its operational efficiency would suffer by accepting.

Implementation

If the Resources Committee at any time foresees the possibility of redundancy, it will convene a Redundancy Committee comprising members of the Resources Committee along with the Chief Executive. The committee will examine the circumstances which had led to the possibility of redundancy, will consider the options open to NICVA, and will report upon these options and its recommendations thereon to the Executive Committee.

Consultation

As stated in Point 1 of the ‘Principles’ section of this policy, as soon as the possibility of redundancy has been identified by the Redundancy Committee, a Redundancy Consultative Group will be established composed of members of NICVA’s Staff along with representatives of SIPTU or the recognised union at the time.

Collective Redundancy Consultation

If a situation arose where NICVA must consider making 20 or more employees redundant, it will follow a formal consultation process with the recognised Union and elected staff representatives in line with the relevant legislation in force at that time.

This consultation period will commence no less than 30 working days before any notice of redundancy is served.

The consultation will cover:

  • reasons for the proposed redundancies
  • numbers and descriptions of the staff whom it is proposed to dismiss and the total number of such staff employed by NICVA
  • the proposed method of selecting staff who may be dismissed
  • the proposed method of carrying out dismissals with due regard to any agreed
  • procedure, including the period over which dismissals are to take effect.
  • proposals for voluntary redundancies
  • proposed method of calculating redundancy payments.

Individual Consultation

Individuals who are at potential risk of redundancy will be advised of the situation as soon as possible and given the opportunity to put forward suggestions to avoid or minimise the redundancy situation.

A formal selection process will be undertaken where there is a reduction in the need for employees to carry out work of a particular kind, a number of individuals are employed in that area of work and individuals to be made redundant cannot be clearly identified by the specialist nature of the work. This will seek to identify those individuals with the knowledge and skills to meet the present and anticipated needs of NICVA. The criteria for selection will based on those factors listed above, in Point 3 of the ‘Principles’ section of this policy, and will be made available to all those identified as being at risk of redundancy. A redundancy selection committee comprising members of the Resources Committee and the Chief Executive will be established to undertake the selection.

Individuals selected for redundancy will be given written notification to that effect and invited to a meeting to discuss their selection. They will be provided with details of the reasons for selection in advance of this meeting. The individual shall have the right to be accompanied at that meeting by a Trade Union representative or work colleague and shall have the opportunity to make oral or written representations in respect of their selection. Following the meeting, and having taken account of any representations made by the individual, the individual shall be advised in writing of the decision. Individuals selected for redundancy shall be advised of their right to appeal against the decision.

Appeals

Any employee who has been notified of redundancy has the right of appeal against this decision. Information regarding the appeal process will be notified to the employee in the notice letter. Appeals must be submitted within 10 working days of the written notice of redundancy, clearly stating the reasons for the appeal. The appeal will normally be heard within 10 working days of receipt of the appeal request.     

Redeployment

Positive action will be taken to place staff under notice of redundancy in any available alternative positions where possible. Staff will be notified in writing of all alternative vacancies as they arise. This notification will include details of how the vacancy differs from the individual’s current role. Suitability will depend on the nature of the alternative employment. Whilst it will be assessed on an objective basis, the issue to be determined is whether the job is suitable in relation to the employee. It will therefore be considered whether the post matches the employee’s skills and experience and whether the terms on offer are comparable with his/her existing contract. The grade for the actual job occupied will always apply, as grades relate purely to jobs and not to individuals.

Individuals under notice of redundancy have a statutory right to a trial period of four weeks in any suitable alternative employment within NICVA. If, during this period, the employment is terminated by the employee or employer for a reason connected with the new contract, the individual will remain eligible for a redundancy payment. If, however, the employee unreasonably terminates the contract, he/she will not be entitled to a redundancy payment. Eligibility for a redundancy payment may also be lost if an individual unreasonably refuses an offer of suitable alternative employment.  The trial period of four weeks may be extended by agreement of both parties.

If an employee is re-deployed to a fixed-term post, which is not extended or renewed at the end of the fixed-term, NICVA will make a redundancy payment to the employee, on the basis of total service with NICVA.

Time off to look for new work or for training

Individuals who are under notice of redundancy will be entitled to a reasonable amount of paid time off to look for work or to arrange training.

Assistance

Individuals who are subject to the provisions of this policy may seek further advice and assistance from the HR Manager.

Redundancy payments

There is a statutory limit on the amount of a week's pay that can be taken into account in working out the redundancy entitlement. The limit changes annually in line with the retail prices index (up or down) as appropriate. The current weekly limit is £450*

*February 2013 figure – this will change annually.

Less than 2 years continuous service

Staff with less than 2 year’s continuous service will not be entitled to a redundancy payment. NICVA will give at least four weeks’ notice in writing to all members of staff.  Where an employee is not required to work their notice, a payment in lieu of notice equivalent to four weeks’ salary will be made.

More than 2 year’s continuous service

The redundancy payment due to each employee under the statutory redundancy payment scheme depends on his or her age and length of service (up to twenty years). This determines the number of weeks pay due, which is then subject to the limit on weekly pay.

The calculation is based on the following:

  • 0.5 week’s pay for each full year of service where age during year is less than 22
  • 1.0 week’s pay for each full year of service where age during year is 22 or above, but less than 41
  • 1.5 weeks’ pay for each full year of service where age during year is above 41
  • Only the 20 most recent years (maximum) will be taken into account.

Notice payments (subject to tax and National Insurance contributions)

Employees whose posts have been selected for redundancy are entitled to notice of termination of their employment. This will be either their contractual notice or their statutory notice, whichever is the greater.  For example, an employee who has 5 years service may have one month’s contractual notice but 5 weeks statutory notice. They will therefore receive the latter notice of termination of their employment, as this is the greater.

Where Employees whose posts have become redundant are not required to work their notice period, a pay in lieu of notice payment will be added to his/her final payment.

Holiday payments (subject to tax and National Insurance contributions)

The outstanding holiday figure is calculated to the end of the lieu of notice period.

All payments will be made in the appropriate month and in line with the employee’s normal payroll.

We share NICVA’s policies to assist organisations in drafting their own. However, our policies are relevant to NICVA and are not samples. They should not be replicated, but may be used for reference purposes, in conjunction with other guidance available. NICVA cannot accept any claims arising from error or misinterpretation.
alex.hastings@nicva.org's picture
by Alex Hastings

Human Resources Manager

[email protected]

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