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Ben Jones
Ben Jones, UK Lawyer
Category: Law
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Experience:  Qualified Solicitor
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Evening - Im in a scenario where my current role as Managing

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Evening - I'm in a scenario where my current role as Managing Director for the business is no longer required as there is a plan to merge the business within other offices. I agree with the strategy but thought this May be a little way of. In December I attended a meeting where structure charts where shown as me in a Distribution Director role, albeit in a group level, but fundamental change in my current role as no P&L responsibility. I also have evidence of emails where reporting lines were planned to change ASAP. No process has been followed and no HR involvement whatsoever. The parent company have realised what a mess it is in with the situation and have back tracked a little, but handing out structure charts etc made me very unsettled. Today they have offered me a group sales role but again no HR process followed. I feel I need to move on and find another MD role. In May 2013 the parent company tied me in to a 3 year deal with a retention bonus paid, if I leave a pro-rata claw-back would be required. I'm also entitled to a 2013 annual bonus. So, with retention bonus and all above points I'm very nervous in my next step/action. I feel I need to make a grievance, as feeling although they have back tracked, this is to late and they have breached my current contract and restrictive covenants ? I would like to be seen as a good leaver!

Ben Jones :

Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today.

Ben Jones :

What are your specific queries in relation to this situt

Ben Jones :

situation?

Customer: Am I technically in a redundancy position, my current role is at risk? There has been no discussion about other MD vacancies/opportunities that may be available to me, other than the group sales role offered today. There has been no HR process being followed and no consultation in the change of my role, or depending how you see it, potential demotion.
Customer: Sorry hit reply to quick...therefore am I being forced to find an alternative MD role outside the company. Do you feel there is grounds for constructive unfair dismissal if I was to resign, or hold settlement/compromise discussions?
Ben Jones :

ok let me get my response ready please

Customer: Thanks
Ben Jones :

The term 'redundancy' is used to describe a situation in which an employer decides to reduce the number of its employees. There are various reasons as to why redundancies may be required, such as economic pressure, changes in the nature of products/services offered, internal reorganisation, workplace relocation, etc. The reason for the proposed redundancies will rarely be challenged and the employer will simply have to justify that the actual reason satisfied the statutory definition of a redundancy, which can be found in The Employment Rights Act 1996:


 


1. Business closure – where the whole of the employer’s business is closed


2. Workplace closure – closure or relocation of one or more sites


3. Reduced requirement for employees to carry out work of a particular kind (this is where many employees get confused as they believe a job has to actually disappear for them to be made redundant).


 


The third reason is the one most likely to apply to you and the one that creates the most challenges. Examples of when there is a reduced requirement to do work of a particular kind are:


• The same amount of work remains but fewer employees are needed to do it. This includes consolidating some of its jobs (e.g. spreading out certain jobs amongst existing employees).


• There is less work of a particular kind and fewer employees are needed to do it (both the work and the headcount shrink)


• There is less work of a particular kind, but the same number of employees are required overall.


 


So as long as the employer can show that their situation fell within one of the accepted reasons for declaring a redundancy, the test will be satisfied and the focus then shifts on the remainder of the redundancy procedure. This would include what consultation took place, whether any suitable alternative employment was offered to those at risk and the general fairness of the redundancy procedure applied by the employer.


 


In terms of suitable employment, an employer has a duty to offer those employees at risk any suitable alternative employment (“SAE”) that may exist at the time. The objective is to keep the employee in a job rather than make them redundant. If nothing exists or any offer is unsuitable you may leave and retain your redundancy pay, remaining a good leaver as you would be made redundant.


 


So the key is whether the employer is treating this as a redundancy situation and what they are doing about it. I would advise against constructive dismissal as that is a difficult and risky claim and instead you may wish to highlight any shortcomings in the process followed and try to negotiate a settlement to leave as it could be the best for both parties, instead of being involved in lengthy legal proceedings.

Customer: Ok thank you. Thought I may have some grounds for a grievance as they had breached my contract by not following an at risk process?
Ben Jones :

yes if there is a specific procedure which they have not followed when they should have, then you have the right to raise a grievance

Ben Jones :

But if the grievance is resolved, for example they rectify their errors and follow a fair procedure and do everything by the book then it would likely remve any cause for constructive dismissal/unfair dismissal

Ben Jones :

Hi, are you still there?

Ben Jones :

Please let me know if this has answered your original question or if you need me to clarify anything else for you in relation to this?

Customer: Hi, sorry was unsure of how logged off. Thank you for coming back to mr and the further points. One final question is if I had been forced to look for alternative employment as an MD because they had not followed the process which is the situation currently then this would not remove the cause for constructive unfair dismissal?
Customer: thank you for your help
Ben Jones :

Well constructive dismissal occurs when the following two elements are present:


• Serious breach of contract by the employer; and


• An acceptance of that breach by the employee, who in turn treats the contract of employment as at an end. The employee must act in response to the breach and must not delay any action too long.


 


To qualify for constructive dismissal the breach must be so serious that the continued employment is no longer possible. You must also consider what you could potentially get out of claiming constructive dismissal – you will only be compensated for loss of earnings arising out of being forced to leave, so if you have found another job that pays similarly and start it soon after leaving, you have not suffered many losses and your compensation will be minimal, certainly not something worth pursuing in tribunal. Nevertheless it is something you can use in your argument if you were pursuing a settlement, for example you may threaten constructive dismissal if necessary in your negotiations, even if you will not go through with it.

Ben Jones :

Has this clarified things for you?

Customer: Yes thank you Ben.
Ben Jones :

Great, you are most welcome. Please take a second to leave a positive rating for the advice I have provided as that is an important part of our process. Thank you and feel free to bookmark my profile for future help:



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