HR: Top Tips for Redundancy and Restructure

This summary is based on Judicium’s HR: Top Tips for Redundancy and Restructure ‘Sofa Session’ from the 8th of December, with our expert Suzanne Ravenhall, MCIPD.

This session was centred reviewing your policy and seeing if the process is financially viable; seeking advice, preparing your business case and determining if redundancies are necessary; and obtaining approval, checking the modification order and notice periods and above all being supportive.

Restructures, redundancies, and their financial implications can be such a massive headache for schools. We find there is a lot of confusion about how to work through the process! It can be really bewildering and leave you feeling like you’re drowning. It is critical you know you are not alone in those feelings.

At Judicium we know that having a plan and robust proposal will make all the difference! Now is often the time of year where schools are looking at their budgets and considering a restructure to take effect from the new Academic Year. Timescales are essential, so here are our 8 top tips for planning a restructure.

Tip 1: Check your policy and Familiarise yourself with the policy you have

It is very important to know what staff related policies are in place before you start any of these processes. The majority of policies in the education sector go above and beyond to ensure a fair restructure or redundancy process.

Important points to check in your policy:

• Consultation period - From a legal point of view, if you are looking at making less than 20 posts redundant, there is no obligation to a consultation period of 30 days. However, policies often state that regardless of the number of staff or posts affected, a minimum of 30 days of consultation is needed with staff before a decision can be made. This consultation period is 30 calendar days; however, this consultation time needs to be meaningful. For example, it is not good practice to start this period before a school holiday.

• Unions - Policies are often drafted in conjunction with unions and will therefore state that unions need to be involved from the beginning regardless of how many redundancies. That means that the unions are invited to the initial consultation meeting in which the process is explained. An individual also has the right to be accompanied on their one-to-one consultation meetings and any meetings further down the line.

This shows how important it is to know your policies and to know your timeframe before launching a restructuring process. You don’t need a policy on redundancy or restructuring before starting the process if you don’t have one yet. It is possible to go through the process without one.

Tip 2: Look at the costs of the process.

If you are looking to make redundancies, there will be redundancy costs and payments. Especially with members of support staff who are aged 55+ and have been a member of the local government pension scheme for more than two years. If they are aged 55 on the date that they are made redundant, there will be an additional strain cost to be paid by the school.

The strain cost is a top up cost that the school will have to pay to allow the individual to draw their pension when they are made redundant. The strain cost is the difference between what they have accrued up until the day they were made redundant and what they would have accrued up until the age of which they could claim their state pension age. The local Government Pension Scheme can provide you with the strain costs and then you can work out if it is financially viable. If the individual has passed their state pension age, there will be no strain costs involved.

Tip 3: Make sure you spent time preparing the business case. 

Preparing the business case is often the hardest and most time-consuming part of the process. This document outlines:

• What you are doing.

• Who is it going to impact?

• Why you are looking to make these changes.

From a legal point of view there is no strict format in which the business cases must be presented.

You should set out a clear timeline so staff can expect things to happen. The document also needs to clearly outline how you are planning to make redundancies and appoint people into new roles. For example, will there be a skills audit? Are you using selection criteria? If so, what are these criteria? Will there be interviews?

The more time you spend on preparing that document, the smoother and easier the consultation process and restructure will be.

Tip 4: Consider whether what you are seeking to achieve could be treated as a change to terms and conditions of individuals’ contracts rather than a full restructure. 

Essentially from a legal perspective, provided there is staff agreement, you can look to make any changes to contracts that you like (within the parameters of the law). Historically, we have had clients who made changes to TLR’s and approached staff informally to explain that the current TLR structure was not affordable. To secure the staff’s jobs, they asked their thoughts about proposed new structure and changes. The staff agreed to have overall job security and avoid the process of a restructure.

 

Tip 5: Make sure the governing body/trust board (whichever is the relevant body to your organisation) signs off on the initial proposal.

They need to agree and understand what you are doing and why. In the current circumstances this does not need to be a full governing body or trust board meeting, it can be done remotely. After the consultation period there might be some minor changes from the original to the final proposal, therefore they will also need to sign the final proposal before you proceed.

Tip 6: Bear in mind notice periods when looking at your timeline and restructure redundancy processes.

If you are following the green book for members of support staff in your school, you obviously have a lot more flexibility in terms of when notices can be issued to staff. There are no set periods for a notice, however, longer serving members of support staff are entitled to maximum statutory notice. This is one week for each complete year of service, up to a maximum of twelve weeks.
 
If you are following the burgundy book for teaching staff, there are strict dates for notices by which you need to comply to complete the process and give notice to staff. If you plan to have your restructures in place by the start of the next academic year (September) and your restructure involves teachers, you must have exercised and completed the process and issued notice by the 31st of May. Any later than that, you effectively have missed the boat and you will end up paying a member of teaching staff an additional four months of pay, until the end of December that year.
 
Although it may seem like there is a lot of time, the reality is that you must start these processes between January and May to restructure in September.

Tip 7: Remembering or being aware of the Modification Order.

The modification order is a piece of legislation that states, ‘if a member of staff has worked continuously in different schools, and they are made redundant, that previous service will be taken into account when calculating that person’s redundancy payment.’ The only organisation that it does not apply to are independent schools.

On the flip side, if a member of staff finds a job at another school that starts within one month of their contract coming to an end, they are deemed not to be made redundant and are not entitled to redundancy payment. If they get a job in another sector, then this does not apply.

Tip 8: Be Supportive

Whatever process you are going through, whether it is changes in terms and conditions, restructure, or redundancy processes, it is all very stressful for managers overseeing that process and the members of staff. We need to be as supportive as possible for those involved in the process and those overseeing the process.
 
Our advice to you is, do not underestimate the time this process can take. It will be sensible to begin the process as early as possible in the New Year to get this process underway. We are here to provide practical guidance and top tips to help with a smooth restructure.

Helpful Links:

If you require any support in any of these steps or would like to talk to someone surrounding some support for your school, please do not hesitate to call us on 0203 326 9174 or email georgina.decosta@judicium.com.

You can also find details regarding Judicium's HR Advisory service here.

If you’d like to review Judicium’s forthcoming sofa sessions for the term, please click here