BDBF Offers Expert Advice on Achieving an Elegant Redundancy

With reports circulating that Deutsche Bank have confirmed plans to axe up to 23,000 staff, with some redundancies in the UK has sent shockwaves through the financial and business community, reminding employees that, the risk of redundancy still remains high.

Arpita Dutt, Partner at leading employment law firm BDBF, provides some top tips for senior executives in financial services and other employees about to be engaged in a redundancy process, and guidance on the dilemma facing expatriates in this situation.

Our ‘Top Tips’ for redundancy scenarios

  • Do your homework: check what your contract, company policies, and any relevant collective agreement says about redundancy. They might refer to a right to enhanced redundancy pay (over and above statutory entitlement) or fixed procedures. If so, make sure that your employer is doing what they are supposed to do. Enhanced redundancy terms for City employees are common. Also, check bonus and share schemes – they might incorporate “good leaver” terms if you are dismissed for redundancy.
  • Phone a friend: most employers allow employees to be accompanied at redundancy “at risk” meetings by a colleague or trade union representative. If you aren’t told that you can be accompanied at an “at risk” meeting, then ask. Bring along someone you trust and who you can rely on to take a detailed note. This will be a usual record of the meeting and enables you to properly engage in the consultation process. If your employer’s notes are inconsistent with your own (or your companion’s), ask your employer to put a copy of your notes on file.

  • Question time: in order to fairly dismiss for redundancy, your employer should consult with you about the redundancy situation and consider alternative roles. If you have any questions during the consultation process, ask them. Key issues to look for:
  • Have you been told why your role is at risk? Does it make sense?
  • Have you been told who else is at risk? Has one of your colleagues been “missed out”?
  • Do you think that other people should have been included in the pool?
  • Do you think that your employer should have considered “bumping” (i.e. removing others from their roles so that you can fill their vacancy)?
  • Have you been told about all existing vacancies (including roles that are junior/senior to yours)? Have you been given a fair opportunity to apply for those roles?
  • Have you seen the selection criteria for alternative roles? Do you think they are fair?
  • Is there a job vacancy that you haven’t been told about?

  • It’s a numbers game: if your employer is proposing to make 20 or more employees redundant in a period of 90 days, they have additional collective consultation obligations. If they fail to comply with these obligations, you may have an additional claim for up to 90 days’ pay.

  • Is there another reason?: employers often view “redundancy” as the easiest way to eject an employee and retain the employees they really want. For that reason, a redundancy process can be used to cloak more sinister acts (even discrimination or repercussions of whistleblowing). If this is the case, you may have additional, more valuable claims against your employer beyond a claim of unfair dismissal. If you suspect discrimination or other unlawful acts, or you think that redundancy is being used to “mask” another reason for your exit, make a careful note of anything that is said or done which supports your allegation. This can be used as evidence later down the line.

  • Appeal: as part of the redundancy process you should be given a right of appeal. Exercise your right to do so. Make sure your appeal is submitted in time and identifies the specific issues you have with the redundancy process or decision.
  • Protected conversations and settlement agreements: in the City a likely route is for your employer to circumvent the above procedures and offer you a settlement agreement on a confidential basis and ask you to seek independent legal advice on its terms. The written agreement will set out terms that will seek to buy you out of any contractual and other claims such as unfair dismissal you may have by offering you compensation, and will ask you to waive any claims in return for signing the agreement. A standard contribution to legal fees for you to obtain advice on the terms and effect of the agreement is usual. Any negotiations on the terms of the agreement will be confidential and are unlikely to be admissible in any proceedings, unless your employer behaves in a particularly improper manner towards you during the protected discussions.

The expatriate dilemma

A redundancy situation is tough for anyone. However, for employees assigned to work outside of Great Britain, an uncreasing reality for those who see international assignments as an acceleration of their upward career trajectory or just have wanderlust , the prospect of job cuts on their return can be even more of a concern as the ability to challenge redundancy by way of an unfair dismissal claim may not be available.

This is because of the limited territorial scope of the legislation which establishes the right to claim unfair dismissal. Generally speaking, under that legislation (and as a result of a chain of cases on the issue) only a limited category of employees working outside of Great Britain will accrue the right to claim unfair dismissal in Great Britain. For those who don’t fall in specific categories of worker (such as employees working in a territorial political or social enclave or posted overseas for the purpose of a business in Great Britain – e.g. being a foreign correspondent on a newspaper), the employee must show that they have a sufficiently strong connection with Great Britain in order to accrue the right to claim unfair dismissal.

Whether or not there is a sufficiently strong connection between the employee and Great Britain depends on the facts. Relevant issues may include:

  • Where the employee calls “home”;
  • The currency of their salary/benefits;
  • How long they have been outside of Great Britain and how often they return; and
  • The jurisdiction in which issues relating to their employment have been handled.

If the employee cannot establish a strong enough connection and doesn’t fall into any of the specific categories, they will not be able to claim unfair dismissal in Great Britain. This means that unless they have accrued rights elsewhere, the options for legal recourse following redundancy are worryingly limited. For that reason, and given the tricky nature of the law in this area, expatriate employees facing (or in fear of facing) redundancy on their return to Great Britain should seek legal advice. Equally, employees being offered an overseas assignment should consider taking pre-emptive advice on their contract to ensure that their rights are protected.

Redundancy can be an unsettling experience as job loss is not voluntary, and the scenarios that employees can find themselves in can be extremely complex and trying. However, with the right guidance they can be carefully navigated and even turned to your advantage, converting a black situation into one with a silver lining. Seeking help and the right employment law advice is a great place to start.