Employment Law [Redundancy] advice

Hi All.

Apologies in advance for the long winded post, but it's probably important to get enough info here as possible to elicit the correct advice!!!

So, I was employed [full time] by a company for 3 yrs and 2mths up until December 2nd 2015. On that date, I was told to go to the meeting room and meet with the head of HR - I was given no notice of this meeting before the 2nd and on that date I was given about 15 minutes notice that she was turning up!! During that meeting - which I recorded on my phone - I was told that the company I worked for was 'no longer financially viable' [as the parent company was no longer willing to fund the company's activities which it had been doing for the past 12 months].

The company situation :

I worked for a small company - let's call it company A - which was a part of a larger company - let's call it company B [over 150 employees]. Company A was 76% owned [by way of ordinary shares] by Company B. The two directors of company A each owned 12% of the remaining shares. They were also employees of the company and the only two other employees of the company at the time of my redundancy. Company A was subject to the same terms and conditions as Company B and all handbooks, policies etc were company B's. The Head of HR that carried out my dismissal was the Head of HR for company B. The handbook for company B states that company A is a part of the 'group' of companies.

I have appealed against my dismissal for the following reasons :

1. There was no consultation period.

2. There was no procedure followed for the dismissal - I was summarily dismissed that day with an effective end date of the 2nd December. I was told to leave the office there and then. I was given no advance warning that the meeting would be taking place, nor was I offered the chance to have a witness present at the meeting. The dismissal was confirmed in a letter which was handed to me at the meeting and was on company B headed paper.

3. The reason for redundancy - the company is clearly not 'no longer financially viable' and continues to trade!

The appeal was heard - by the two company directors that I had previously worked with and who had made the decision to make me redundant. They upheld their original decision to make me redundant!

However, they acknowledged that the process was not carried out in the 'best way'. As a result they sent me an email asking me to check on company B's website for any roles they are advertising that I felt may be of interest and they would put me in touch with the relevant person. I did not respond to this email as it was sent about 12 days after I had been dismissed by the company. They then stated in the appeal outcome letter that they felt by sending me the email in the first place that they were satisfied that they had carried out a full and thorough consultation. They then stated that they would be changing my effective date of termination to the 22nd December as they believed it would have taken about 3 weeks to consult had they done so. I acknowledged receipt of the appeal outcome letter and stated that I did not agree to the change of date!

They also stated in the appeal outcome letter that they had spoken to the Head of HR and she has stated that she did not in any way shape or form state that the company was no longer financially viable. They have now changed the reason for the redundancy and have stated that there are a number of costs associated with the business that company B are currently paying. They have stated that 'if these were to be applied, the company would be breaking even at best'. I had previously asked for evidence of the financial situation of the company and had received the P&L statement for the 12 months until July 2015 and the four months from August 2015 to October 2015. The annual P&L shows a net profit for the year of £110k and the four month P&L shows a current net profit for the period to date of £25k. Neither of these P&L's include the costs which they refer to and there has been no evidence supplied to show they will be applied!!

We are currently at ACAS early conciliation stage and I have today been told that the company is not willing to negotiate further as they are relying on the 'Polkey' argument and therefore compensation will not be paid!

So, one question I have is, in order for them to successfully defend using the Polkey Argument, they will have to prove the redundancy would have happened anyway had they followed the correct procedure and will they therefore have to prove the initial reason given for the redundancy - i.e. no longer financially viable! Or can they now rely on the second reason they have given - can they change their minds on the reason when one argument relies on the parent company withdrawing funding [which incidentally it has never actually given!] and the other relies on the parent company adding in costs to the business that it has never [in the past four trading years] applied!

Bear in mind I still have the original reason recorded which they have subsequently stated was never said!

Secondly, I believe I would be entitled to a 'protective award' due to the fact that they did not follow a consultation process. However, the ACAS expert has today informed me that this would not be an entitlement because there were not 20 or more people made redundant. She told me to look at their website for more info and all I could find was this :

Protective awards for failure by an employer to consult

In cases where employers have failed to consult with employee

representatives over proposed redundancies, an employment tribunal

can make a ‘protective award’. The employer is required to pay

employees covered by a protective award their normal week’s pay for

each week of a specified period, known as the protected period,

regardless of whether or not they are still working. To be covered by

an award, employees must:

• belong to a group specified in the award

• be employees whom the employer plans to dismiss or has already

dismissed as redundant, and

• be employees in whose case the employer has failed to comply

with the information and consultation requirements.

My own research has found that protective awards are covered by s188 of the Trade Union and Labour Relations act but this only mentions it in the context of 20 or more people being made redundant. I have tried to find the relevant law relating to less than 20 people but the best I can come up with is this - again from ACAS :

When you are making fewer than 20 employees redundant you are legally required to have meaningful individual consultation.

I cannot find the law which they are referring to as consultation only seems to be covered by s188 of the TU&LR Act. If that is the legislation they are referring to then it would stand to reason that the protective award would also apply!

If anyone has the definitive answer for this it would be much appreciated...

Apologies again for the long winded post, so far I have gone through this whole process and have not bothered with the expense of Legal Counsel - of to experience the delights of the Citizen's Advice bureau on Friday and I'm sure that will be delightful!

No idea about the right course of action sorry - but I recently had cause to use an employment lawyer and the first phone call was free - so you can at least find out if its worth fighting without paying out. I used Fiona Martin at Martin Searle solicitors in Brighton. Im sure others can help too. http://www.ms-solicitors.co.uk/about-us/meet-the-team/fiona-martin/

Clearly they have not followed legally mandated procedure and so the dismissal is automatically unfair. They are required to give appropriate notice of meetings in writing, permit a representative to attend etc.

"Polkey" is not a defence. If you bring a claim, based on what you have written above about their failure to follow correct procedure, you will "win", ie. there will be a finding of unfair dismissal.

"Polkey" is an argument around quantum. In other words they will ask the judge to award you a smaller compensatory element because, following "Polkey", it was inevitable you would have been dismissed even if the correct procedure had been followed. There are two elements to an award: basic and compensatory. The "basic" is the one related to length of service, age etc... "Compensatory" relates to, for example, time spent unemployed whilst looking for a new job.

It sounds as though you have decent grounds and it also sounds as though your employer is inexperienced or just plain dodgy in their approach to these things. Remember that you do not necessarily need to go through with a claim to "win" - you just need to extract a decent settlement offer.

As Tim says, I would definitely seek a free legal consultation if I were you and in addition to your basis legal rights you (or your lawyer) need to carefully check what your contract says about redundancy. There's a fee to bring an Employment Tribunal claim so you need to carefully weigh up the risk / reward; if, for example, they are genuinely skint then you might not get any money if you win. The lawyer can advise. Also, don't hang around because limitation periods on employment claims are quite short (3 months I think).

There are various legal directories that you can use to source an Employment lawyer. Legal 500 and Chambers are two of the better known. Like any business, lawyers aren't going to send you a bill for just answering the phone (no matter how they are portrayed sometimes) so don't be shy in picking up the phone, saying you want to speak with an employment specialist in relation to unfair dismissal claim and asking for a free consultation to enable you to consider your options. Unless you have been through a client verification process with them (providing ID etc.) they aren't going to be billing you.

PS. pretty sure the protective award only applies to collective consultation scenarios (ie. mass redundancy). As you are going to speak to a lawyer anyway though, get them to confirm!

Clearly they have not followed legally mandated procedure and so the dismissal is automatically unfair. They are required to give appropriate notice of meetings in writing, permit a representative to attend etc.

 

"Polkey" is not a defence. If you bring a claim, based on what you have written above about their failure to follow correct procedure, you will "win", ie. there will be a finding of unfair dismissal.

 

"Polkey" is an argument around quantum. In other words they will ask the judge to award you a smaller compensatory element because, following "Polkey", it was inevitable you would have been dismissed even if the correct procedure had been followed. There are two elements to an award: basic and compensatory. The "basic" is the one related to length of service, age etc... "Compensatory" relates to, for example, time spent unemployed whilst looking for a new job.

 

It sounds as though you have decent grounds and it also sounds as though your employer is inexperienced or just plain dodgy in their approach to these things. Remember that you do not necessarily need to go through with a claim to "win" - you just need to extract a decent settlement offer.

 

As Tim says, I would definitely seek a free legal consultation if I were you and in addition to your basis legal rights you (or your lawyer) need to carefully check what your contract says about redundancy. There's a fee to bring an Employment Tribunal claim so you need to carefully weigh up the risk / reward; if, for example, they are genuinely skint then you might not get any money if you win. The lawyer can advise. Also, don't hang around because limitation periods on employment claims are quite short (3 months I think).

 

There are various legal directories that you can use to source an Employment lawyer. Legal 500 and Chambers are two of the better known. Like any business, lawyers aren't going to send you a bill for just answering the phone (no matter how they are portrayed sometimes) so don't be shy in picking up the phone, saying you want to speak with an employment specialist in relation to unfair dismissal claim and asking for a free consultation to enable you to consider your options. Unless you have been through a client verification process with them (providing ID etc.) they aren't going to be billing you.

Hi Benji.

Many thanks for your reply.

As you have mentioned, I will 'win' in respect of having the redundancy declared an unfair dismissal. However, my question around Polkey was concerning the amount of the compensation that will be paid - the basic award would be exactly the same as the statutory redundancy that they have said they will pay - so the compensation element is the bit I am more concerned about.

So, the question around that is that they would have to 'prove' that the redundancy would still have happened even if they followed the correct procedure. However, they have now given TWO reasons for the redundancy which are polar opposites - one refers to putting money in to the business, the other to taking it out! - so would they have to 'prove' the first reason that they gave or can they just pick and choose between the two they have given.... My suspicion is that they would have to prove the first but I can't find anything to substantiate that....

Could I suggest you email Stephanie Kleyman stephanie@kleymansolicitors.com http://www.kleymansolitors.com. She is an employment expert and will give you an initial consultation to discuss your options without charge.

She is also a season ticket holder!