This article explores the potential implications of the proposed Employment Rights Bill 2024, and how it may influence redundancy negotiations between universities and their staff.

The Times has reported (on 21 July 2024) that UK-based universities are facing a “cash catastrophe,” and that 40% of institutions are forecast to run deficits this year (more than a third of universities have reported that they faced financial difficulties this past year). For those working at the universities, this means potentially making many employees redundant, in order to save costs in an increasingly competitive market. Goldsmiths University has reportedly announced a restructure that puts up to 132 full time jobs at risk of redundancy (Guardian, 27 March 2024).

On 17 July 2024, King Charles III announced several new bills in the King’s Speech. One of them, was the Employment Rights Bill 2024, endowing further rights to employees, from the first day of their employment contract.

This article explores the potential implications of the proposed laws, and how it may influence redundancy negotiations between universities and their staff.

The Government’s Employment Rights Bill

The new government has hinted at several policies concerning employee rights, but for the purposes of this article, the most relevant are:

  • Ending the practice of “Fire and Rehire” (or “Fire and Replace”); 
  • Ensure rights on parental leave, sick pay and protection from unfair dismissal for all workers are granted and protected on the first day of employment. Currently, these rights are only effective after two years of continuous service (unless the unfair dismissal can be shown to be based on and act, or acts, of discrimination or as a result of an employee making a protected disclosure;
  • Making Flexible Working a default right from day one of employment; and
  • Women who have given birth will be given enhanced protections from dismissal for six months after returning to work from maternity leave (save for exceptional circumstances).

Redundancy

The statutory definition of redundancy is found in section 139 of the Employment Rights Act 1996 which states:

An employee is dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to the employer ceasing or intends to cease the business for which the employee was employed, or when the requirement for the employee to carry out work of a particular kind (or in a particular place) has or is likely to diminish.

In the matter of universities, due to their reported financial difficulties, they will most likely have to identify opportunities to restructure departments and dismiss many members of staff to reduce their operating costs, in order to avoid becoming insolvent and facing administration or liquidation.

Collective redundancies

When an employer makes 20 (or more) redundancies, then it will be considered a collective redundancy. This means that the employer has additional procedural responsibilities that must be followed. Failure to adhere to the correct procedures when implementing collective redundancies may expose the employer to liability for unfair dismissal claims, which ultimately creates a risk of further expense in terms of defending such claims, settlement costs (to the employees being made redundant) and legal fees.

Unfair dismissal

As discussed above, unfair dismissal may soon be a right for employees from the first day of employment. When making an employee redundant, the employer will need to take steps to minimise its exposure to employment tribunal claims. One of those claims will be unfair dismissal. 

Unfair dismissal claims may arise for a variety of reasons. The most common include not giving a valid reason for the dismissal, the employer not following a fair process, discrimination, whistle blowing and/or a repudiatory breach of the employment contract.

Unfair dismissal and redundancy

When employers are in financial difficulty and need to reduce staff costs as quickly as possible, there can be a temptation to cut corners. This usually means giving invalid reasons for dismissal (a sham redundancy) or not following the correct procedures. In these circumstances, claims for unfair dismissal may arise. The usual trade-off is that employees will be able to negotiate a higher redundancy/settlement pay-out to avoid a costly employment tribunal claim.

Section 105 of the Employment Rights Act 1996 details the various grounds that will make a redundancy dismissal automatically unfair. This includes when an employee is selected for the following reasons:

  • When an employee is pregnant.
  • When an employee is absent due to maternity/parental leave
  • When an employee is absent or has high absence levels due to a disability.
  • For attempting to assert a statutory right.
  • Because the employee is a trade union member.

The above is not a complete list, but those circumstances that are most relevant/common.

We understand that some universities have told staff internally that they must work in the office full time, rather than working from home – to prove themselves. Given that the right to make a flexible working request may soon be a statutory right from day one, which includes the hours worked, as well the location (working from home), to make someone redundant because they have previously been permitted to work from home and have now declined to return to the workplace, may give the employee concerned a claim for unfair dismissal. 

Preparing for redundancy

If you are working at a university and have been warned of a restructure, it is important to review your institution’s Staff Handbook, and refresh your memory on its policies and procedures, as well as your contract of employment. It may also be worth making contemporaneous notes on any meetings and discussions that take place in relation to your potential redundancy. This will assist your lawyer in assessing the merits of your case and exploring whether there is the potential to negotiate a settlement sum for you that goes beyond your contractual and statutory entitlements. 

If you have been made redundant and believe the process or the grounds for your selection was flawed, or you are offered enhanced redundancy severance terms under a settlement agreement, please contact one of our employment law advisors. 

 

Griffin Law is a dispute resolution firm comprising innovative, proactive, tenacious and commercially-minded lawyers. We pride ourselves on our close client relationships, which are uniquely enhanced by our transparent fee guarantee and a commitment to share the risks of litigation.  For more details of our services please email justice@griffin.law or call 01732 52 59 23.

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