Redundancy Selection - unfair?

Redundancy Selection unfair

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The shop floor team consists of 5 employees working 42 hours per week (full time), 3 employees working 35 hours per week (part time) and 6 employees working a variety of other part time hours (25 and below).

We are in financial difficulty and need to cut costs by reducing staffing levels and want to keep the 5 contracts at 42 hours, reduce the 35 hour contracts from 3 to 2 and reduce the other contracted hours to just one 18 hour contract.  This justification is based on the operating hours of the store and the rota that covers those operating hours. The changes will save the company about £20,000 per year.

For the redundancy pool we want to only include employees on the 35 hour contracts and below on the basis that there are no changes planned to the number of 42 hour contracts and therefore none of the 42 hour posts are redundant.  My thinking with this is that if they were to be included in the selection pool the 5 people on 42 hour contracts will claim those 5 posts as "suitable alternatives" anyway, and the other staff could not because the contract varies in terms of contracted hours so the 42 hour contracts for them would only be an "alternative".  My understanding is that legally we have to place people in suitable alternative posts first and look at only alternative posts second.

Is this understanding correct?  And if so how does this get around part time workers discrimination because in effect only the part time workers would go into the selection pool because the number of part time posts are reducing?


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By policymaker
31st Aug 2010 11:38

Hi Kansel,

The approach to selection for redundancy that you have outlined discriminates against your part time staff and will give them grounds for a claim under the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000. The selection of only part-time staff for redundancy is unlawful as it infringes the requirement to treat part-time workers no less favourably than their full-time equivalents. The only defence of different treatment of full-time and part-time workers is that the treatment is justified on objective grounds. As the store hours can be covered by any number of combinations of full and part time hours (a 42 hour contract can be broken down to 2 x 21 hours, 3 x 14 hours and any number of alternatives such as 35 hours + 7 hours) it is unlikely that a Tribunal would accept that retaining all the full time staff and making all but three of the part time staff redundant is justifiable.

As 80% of part-time workers are women, selecting only part time staff for redundancy may also be a form of unlawful [***] discrimination, although this will depend on the gender mix of your full and part time staff groups. You also need to consider whether the full time and part time groups have other differences that fall within current discrimination legislation such as age, disability, race etc and ensure that, by selecting only part time staff for redundancy, you are not unlawfully discriminating against any of these protected groups.

The issue of "suitable alternative work" is a red herring as you are unlikely to be able to establish an objective case that proves that 42 hour contracts are the only way to cover the store hours. Even if you were able to do this a change in hours may not prevent a job from being a "suitable alternative" for all your part time staff, it will depend on the facts in each case. Finally if the number of contractual hours is a critical factor in deciding whether a role is a "suitable alternative" surely you should only consider the three staff on 35 hour contracts for the two remaining 35 hour roles as all the others would have to change their hours? This approach to "suitable alternative employment" is unlikely to be justifiable in a Tribunal.

To decide whether a role is a "suitable alternative" the nature of the work is the key factor. If all of your full and part time staff have the same or similar responsibilities it is hard to see how you can justify failing to consider all of the staff for the remaining roles. The hours may make the role unsuitable for some staff but that should be their decision not yours. It may even be more economical to employ part time staff to cover the store hours as, for example, this can reduce your National Insurance cost as the employers contribution is not payable on the first £110 a week for each employee. Employing two or more part time staff rather than a full time member of staff could save you hundreds of pounds a year in employers NI contributions. If you pay your staff £6 an hour, a full time member of staff earns £252 a week and you would pay 12.8% of earnings above £110 in employers NI = £18.17 a week / £945 per annum. Employ three part time staff for 14 hours at the same rate and they only earn £84 a week which is below the NI threshold saving your company £945 per full time equivalent, around £6000 pa for the 5 full time 1 x 35 hour and 1 x 18 hour contracts that you are considering. At £6 per hour that would be enough to allow you to offer another 18 hour contract, potentially saving someone from redundancy and the dole queue.

To be fair to all your staff and to safeguard your firm against unfair selection for redundancy and possibly [***], race, disability and age discrimination claims I strongly recommend that you reconsider your approach to the selection process and / or seek legal advice to ensure that it is lawful.

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