Mass reorganisation – what on earth is going on?!
When it comes to making large structural changes in an organisation, there’s often lots of planning and discussion particularly in relation to communicating with affected staff and ensuring meaningful consultation. I’ve talked in an earlier blog post about how, in spite of change being something we see constantly, many still find it very unsettling. I concluded that post by reiterating the importance of taking a people focused approach to change management, and thinking carefully about individual experiences when making these big decisions.
With all of this in mind – what on earth is happening with big companies taking incredibly risky, potentially illegal approaches to change management?!
We started the madness back in December last year where the CEO of better.com informed 900 employees via video call that they would be making large scale redundancies. Vishal Garg issued an impersonal and thoughtless one way video message to employees, that resulted in him latterly issuing an apology for his behaviour. The company did then, however, make significant redundancies that were handled in a similarly poor way with some individuals affected finding out as a result of their severance package hitting their bank account before any communication was issued (Kelly, 2022).
Fast forward to March 2022 when P&O Ferries sacked approximately 800 employees, also via video communication, without giving them any notice, replacing them with cheaper agency workers in order to ensure the continuity of the business (Dean, 2022). Affected individuals were offered a severance package, but only if they signed a settlement agreement as part of the process (Moores, 2022).
Now here we are, in November, with some Twitter staff finding out that they’ve been let go by being unable to use any of their corporate devices and latterly receiving an email confirming whether or not they had a job and (if appropriate) highlighting the offer of a 3 month severance package (Humphrey, 2022) – again, no notice, completely impersonal and no period of consultation.
So….first things first – what are businesses in the UK legally obligated to do if they’re going to make large scale redundancies?
1. On determining that redundancies are a possibility, organisations should have looked at other potential ways to save money to ensure that any job losses are a last resort. Alternatives could include offering voluntary redundancy packages, offering reduced hours, concluding agency or contract workers etc.
2. If redundancies are necessary an organisation will next need to compile a redundancy plan – as part of this they will need to consider who might be affected, fair methods for redundancy selection, what process to follow (i.e. is it a collective consultation or not), support for affected employees etc.
3. They’ll then need to inform employees that redundancies are being considered and open consultation for affected individuals. Consultation should be meaningful and include discussions about the rationale for the redundancies, providing opportunities for employees to suggest alternative proposals, a discussion of the redundancy selection method, opportunities for employees to raise concerns and a summary of support available.
When consulting, organisations should ensure they do this in the right way. If they’re making fewer than 20 redundancies, consultation could take place on an individual, rather than collective, basis (although they may choose to engage in collective consultation instead). There’s also no requirement to notify the governments Redundancy Payment Scheme (RPS). Where more than 20 redundancies are proposed, from a single establishment and these will happen within 90 days the organisation is obligated to consult collectively. They’re also required to notify the RPS if they’re going to make between 20-99 redundancies, 30 days before the 1st dismissal, and for more than 100 redundancies they must notify RPS of this 45 days before the 1st dismissal.
4. On conclusion of the consultation period, the organisation should select employees for redundancy fairly, ensure redundancy payments have been appropriately calculated, serve notice and offer an appeal. They should also facilitate the opportunity for affected employees to search for alternative employment as a reasonable alternative to redundancy.
For more detail on the full process, see the ACAS website - https://www.acas.org.uk/manage-staff-redundancies
This process has been in place for many years, and failure to notify the RPS and afford the appropriate duration of consultation is something that could constitute a criminal offence – so why on earth are business owners taking such a caviller approach?
Well, not all of the companies listed above are subject to UK employment law, which explains how they’ve been able to legally take the approach they have even if morally and ethically it doesn’t sit comfortably. Those who are subject to UK employment law, however, could find themselves facing law suits and an unlimited fine.
Don’t get me wrong – I understand that sometimes business owners have to make really difficult decisions, and where redundancies are being considered it’s a last resort and often a measure implemented to enable the survival of the business. This doesn’t, however, mean that an organisation should give no regard to the law, due process, or even the human beings that their decisions impact!
There’s having a commercial focus, and then there’s just being reckless. The last few years have been really tough for a lot of organisations, but to take this approach is just madness. So I implore you – if you’re in the unfortunate position of having to make some of these difficult decisions, seek advice from qualified and capable individuals that you trust, ensure you’re following the law and due process, and please don’t forget that every one of those employees impacted by your decision is a person first.
Dean I (2022) https://www.dentons.com/en/insights/articles/2022/april/14/collective-redundancies-and-the-p-and-o-ferries-debacle
Moores W (2022) https://sasdaniels.co.uk/blog/did-po-ferries-break-the-law-in-making-800-staff-redundant/
Humphrey A (2022) https://www.bbc.co.uk/news/live/business-63511430