When you are looking to reduce the burden of your payroll, you have to be careful not to leave yourself exposed to a costly legal challenge, writes Sean Reynolds

Many public sector employers are offering voluntary redundancy schemes as they seek to reduce operating costs. But before making redundancies they must first consider their legal obligations, such as redeploying affected employees to suitable alternative roles. They should also tell those at risk of losing their job about vacancies that might suit them.

Redundancy selection criteria must be reviewed, such as by scrutinising knowledge and skills framework competencies, which also offers the added benefit of identifying employees who have not earned their annual pay rise.

Employers should also review arrangements for redeploying their workers. Taking these measures at an early stage can forestall costly legal claims and ensures the most productive employees are retained.

In particular, employers should ensure:

  • full and current job and personal specifications exist for all potential redeployment posts, and that these are easily available to applicants;
  • staff appraisals are detailed and up to date, so they represent an accurate picture of their present skills and abilities;
  • suitable arrangements are in place for trial periods in posts where at-risk employees meet the basic requirements for appointment;
  • initial short-listing arrangements are limited to at-risk employees, giving priority to those seeking redeployment due to the need to make reasonable adjustments in response to a disability, or who are on maternity leave and so have a statutory right to be offered suitable alternative employment;
  • redeployment procedures and policies are carefully reviewed for suitability and managers trained to implement them;
  • those responsible for selecting and interviewing applicants receive training in equal opportunity law to minimise any challenge on grounds of discrimination;
  • liaison arrangements are made with local job centres in order to ensure at-risk employees are aware of services and resources available to them when seeking re-employment, and of any benefits they may be entitled to following redundancy.

If there is a legal challenge at any stage in the redundancy process up to and including dismissal, the employer must be able to demonstrate that it gave due consideration to equal opportunity issues.

In many cases, employers can reasonably hope to redeploy its employees to other NHS employers in the region and avoid making redundancy payments. The strategic health authority should takes a lead role in facilitating local redeployment by implementing collective measures, such as:

  • imposing a recruitment freeze pending setting up regional redeployment measures;
  • undertaking aspirational interviews of at-risk staff to identify posts and areas where they would like to be redeployed;
  • sharing vacancies using “clearing house” arrangements, preferably accessible using an internet based recruitment platform and a standardised recruitment procedure. It is wise to ensure that paper applications remain an accessible option;
  • introducing secondment arrangements to enable staff to try out posts where they might be redeployed;
  • consistent selection arrangements with standardised questions will increase confidence in the overall fairness of the process.

Age discrimination issues

It is unlawful to directly or indirectly discriminate on the grounds of age without justification. The most obvious age-related factors are:

  • length of service;
  • years until retirement;
  • grade pay point;
  • individual redundancy costs.

Case law establishes that the hurdle for justification is not a high one provided the possibility of discrimination and its justification has been considered beforehand. Financial pressures are a recognised fact of life in the public and private sectors. Decisions related to redundancy selection are not immune from these pressures.

Redundancy selection criteria exclusively focusing on financial issues are unlikely to provide a fit for purpose workforce. A disproportionately large number of younger or older employees

in a workforce could leave it without the skills and experience to deliver high quality services.

Costs may form a part of the redundancy selection process, but only as a criterion of equal value to other skills based criteria, and after a careful analysis of how the process is likely to work. Justification requires considering other ways of achieving the same end by non-discriminatory means.