Redundancy and reorganisation

A redundancy situation can arise following a reorganisation or restructure, although not all organisational change will amount to a redundancy situation.

Redundancy is a type of dismissal when a role or position is no longer required. It may occur:

• when there is a closure of business for which the employee was employed
• when there is a closure of a workplace where the employee was employed to work
• when the requirements for employees to carry out work of a particular kind have, or are expected to, cease or diminish. 

• shift pattern
• work location
• grade or job role
• pay 
• numbers of roles, such as a reduction in senior staff
• other changes to your terms and conditions.   

If your contract is being changed as part of a reorganisation, you can see our guidance on contracts. If the only proposed change is to your shifts, please see our guidance on changes to your shifts. 

It is important that you contact us for advice if you are notified of any redundancy or reorganisation proposals. Redundancy should be a last resort after all other options have been considered. 

In any reorganisation or redundancy process a meaningful consultation should take place; usually this is through group and one-to-one meetings. 

An individual consultation is recommended in all cases of redundancy. Your employer should explain why the redundancies are necessary. Collective or group consultation is a statutory requirement where there are at least 20 staff to be made redundant from one establishment. The employer must also start consulting with a recognised union, if there is one, or start a process of electing employee representatives.

Failure to consult with employees may make any subsequent dismissals unfair and in certain circumstances may lead to a claim to an employment tribunal for compensation.

Please read our redundancy and reorganisation: one-to-one meeting checklist. Please also contact us for advice. 

It is good practice for employers to offer employees the right to be accompanied to one-to-one meetings where they are proposing service reconfiguration, redundancies or transfers. However, there is no automatic right to accompaniment or for trade union representation, unless your employer's policy allows for this.

Remember, to have our support, you need to be in the correct category of membership at the time of the notification of reconfiguration, redundancy or transfer. 

Please read our redundancy and reorganisation: one-to-one meeting checklist and contact us for advice.

Redeployment may occur as part of a redundancy process or it may follow organisational restructuring. Your employer may have a redeployment policy which you should obtain and read.

If redeployment is part of a redundancy process, organisations are required to take reasonable steps to redeploy ‘at risk’ employees to 'suitable alternative employment'. For information on how employers determine who is ‘at risk’ see the section on redundancy below.

At risk employees should be considered for vacancies in preference to external candidates or other employees who are not at risk. There is no obligation to create new vacancies. If an at risk employee is the only suitable at risk candidate for a vacancy, the role can be offered without any formal assessment. Any recruitment process must be a fair one. Whether an alternative role is ‘suitable alternative employment’ depends upon a number of factors, including how similar work is to the current role, terms of employment, pay, status hours and location.

Re-banding

If you are likely to be re-banded, please read our redundancy and reorganisation: one-to-one meeting checklist.

If you are redeployed into another role your pay may be affected. However, as pay is one of the determining factors in whether you have been offered suitable alternative work, it is possible that your pay in the new role will be protected for a specified period of time and some employers will have pay protection policies.

If you work within the NHS, Annex 15 of the NHS terms and conditions of service handbook states that pay protection be agreed locally. You will able to request access to your employer's local policy on pay protection. 

If you are employed outside of the NHS any pay protection will be in accordance with your contract of employment, local policy and negotiation. If you are concerned, contact us for advice.

If you unreasonably refuse an offer of ‘suitable alternative’ employment, you will not be eligible for a redundancy payment. You should not turn down an offer without taking advice from us. We recommend that you also read your employer’s organisational change policy.

If you are employed  under Agenda for Change terms and conditions, you should also check the NHS terms and conditions of service handbook section 16.21 to 16.23 (England) and section 16.18 to 16.20 (Scotland, Wales and NI). Under these sections, the right to a contractual redundancy payment will also be lost, if you refuse to apply for suitable alternative employment that has been reasonably brought to your attention.        

An offer of suitable alternative work should be made to you prior to the expiry of your notice period. It may also provide a four week trial period and this is mandatory when the alternative work differs from your existing job. You must always seek advice from us before accepting any 'extended' trial periods as you could be deemed to have accepted a variation of your contract and lose any protection and redundancy payment. 

Contact us immediately (before the end of the four week trial period), if you wish to challenge the redeployment. If you can successfully argue that the offer of alternative employment is not suitable or, if it is suitable, that your refusal is reasonable regardless, for example, you have good reason to reject a suitable offer, then you will still receive redundancy pay if you are made redundant. If there is no suitable alternative work available and you cannot be redeployed, you will be made redundant. 

If your employer is changing from one service provider to another, your existing employment contract could be protected under the Transfer of Undertakings (Protection of Employment) Regulations 2006, as amended by the Collective Redundancies and Transfer of Undertaking (Protection of Employment) (Amendment) Regulations 2014, known as ‘TUPE’. Read more about TUPE.

An employer has to select fairly for redundancy. Your employer should:

• warn those staff who are at risk
• identify the ‘pool for selection’ of at risk staff
• consult with individuals, including why redundancies are proposed, how many, the selection process and criteria, consider comments on the criteria  
• apply proper selection criteria to those in the pool which is, as far as possible, objective and capable of verification 
• inform staff of their scores and allow those selected to challenge them
• consider suitable alternative employment subject to a trial period.

Where possible the above should be with the agreement of local trade unions.

• attendance record
• length of service
• experience and capability performance
• skills and knowledge
• disciplinary record
• ‘last in, first out’ (but only if used as part of a balanced set of criteria).

Whichever are chosen, they must be fair and consistently and objectively applied. Some subjective criteria may be used if applied in this way. 

Further information can be found on the UK government website: Redundancy: your rights.

The redundancy will be automatically unfair in certain circumstances and detailed information on this can be found in the ACAS redundancy guide. Please also see our information on discrimination.

If you feel that your employer has selected you unfairly, you should appeal against the decision using your local appeals process. You may be able to make a claim to an employment tribunal for unfair dismissal and possibly unlawful discrimination. Please contact us for advice.

Your employer should calculate your redundancy pay for you. You should check your contract of employment and terms and conditions which will identify any contractual redundancy arrangements. If you are not entitled to contractual redundancy pay, you may be eligible for statutory redundancy pay.

For NHS staff, the calculations are outlined in section 16 of the NHS terms and conditions of service handbook and staff who qualify maybe able to take their NHS pension early, as an alternative to a redundancy payment. In the first instance, please contact your pension provider for more information and see our pensions guidance, as the rules for early retirement are complex and differ between England and Wales/Scotland/NI.   

If an NHS employer refuses you a redundancy payment, or you disagree with their calculation, you must raise a grievance. To make a claim for a redundancy payment or retirement on the grounds of redundancy, ensure you comply with the requirements set out in section 16.26 (England) and section 16.23 (Wales, Scotland and NI). Please contact us for advice.       

To minimise the number of compulsory redundancies, an employer may invite volunteers for redundancy.  

There is no guarantee that an application for voluntary redundancy will be accepted. Your employer may still wish to undertake a selection process to ensure they do not lose invaluable skills or knowledge. 

Deciding to take voluntary redundancy can be a big decision. It’s important to gather as much information as you can about your entitlements so you can make an informed decision about what to do. You might need to formally ‘apply’ to receive detailed information about the process and what you would receive if your application was accepted. 

Checklist: things to clarify

If you’re considering voluntary redundancy, make sure you are given full details of: 

• your redundancy package (the pay you would receive, and any other benefits/incentives in place) 
• the proposed end-date of your contract (including whether there is any element of pay in lieu of notice and what happens to any accrued annual leave) 
• the impact on your occupational pension (which may involve seeking a pension forecast yourself if your employer won’t arrange one for you. If you work in the NHS, you can find out how to access pension estimates on the NHSBSA website) 
• any rules in place about re-engagement or re-employment (i.e. returning to work for that employer within a certain period of time. For example, if your new job is within the NHS and you start the job within four weeks of the termination of your ‘old’ NHS contract, you may forfeit your redundancy pay). 
• arrangements for employment references, to enable you to find future work 
• arrangements for the return of any work property/equipment 
• arrangements for your lease car, if you have one. 

You should also seek a copy of your employer’s redundancy policy to check all processes are being followed correctly. 

Finally, ask yourself whether your decision is truly voluntary. If you are being pressurised into voluntary redundancy, contact us for further advice.  

Severance schemes 

Your employer might operate a severance scheme to encourage staff to leave employment in return for a severance payment. It might be called a ‘mutually agreed severance scheme’ (MARS) or a ‘voluntary early release scheme (VERS).  

Such schemes are similar to voluntary redundancy, in that both involve a financial settlement for employees who have chosen to leave their job. However, severance schemes are often more generous; they often include financial incentives that exceed what would be paid in a ‘normal’ redundancy package. Also, if you leave under a severance scheme you will be deemed to have resigned (rather than being dismissed by reason of redundancy). This could affect state benefits, tax credits and childcare entitlements. 

You may also wish to seek separate advice about how the scheme would impact your pension entitlements. If you work for the NHS, please see the NHSBSA website.

Again, it’s really important that you understand your entitlements under these schemes so you can make an informed decision about what to do. Use our checklist above to clarify what is on offer to you, and seek a copy of your employer’s severance policy to ensure all processes have been followed correctly. 

RCN support 

If you’ve gathered all the information you need and wish to proceed, provided you were in the correct category of membership at the time of the notification of redundancy, the RCN can check your voluntary redundancy or severance agreement for you. Please contact us for further advice and to be referred to your local RCN office. 

If you’re concerned about what your employer is proposing, or if you feel you are being pressurised into applying/accepting something, contact us for further advice.  

You might also benefit from independent financial advice. As a member of the RCN you’re entitled to a complimentary, no obligation consultation from Quilter Financial Advisers. 

Your employer must allow you reasonable time off work to look for another job or to make arrangements for re-training, provided you have been continuously employed for two years by the date your notice expires. There is no limit to how much time off is reasonable; this depends on your circumstances.

Legally, your employer must pay you up to two-fifths of a week’s pay for this time off, although local policy may allow for more than this. Your employer may allow you to work back the time on a different day, but they don’t have to do this. You may wish to consider taking annual leave rather than losing pay.

If you require any careers advice, please see the comprehensive information provided by our careers service.

Redundancy and reorganisation: one-to-one meeting checklist

Gov.uk

ACAS guidance

The Social Partnership Forum has developed information for staff undergoing NHS transfers

NHS Scotland currently operates a no redundancy policy and all NHS Employers in Scotland follow the NHS Scotland Partnership Information Network (PIN) Guideline on Redeployment.

NHS Wales Organisational Change policy