In recent weeks, we have all been witness to the significant consequences of Vladamir Putin’s invasion of Ukraine – on a human and business level. Many financial institutions have shut-down their offices in Moscow with staff being let go or transferred, and there has also been a ripple effect over here in the City with an impact on banking jobs in London.
Individuals should consider the following questions when at risk of redundancy due to a Russia-related role:
IS IT A GENUINE REDUNDANCY?
If faced with the threat of redundancy, it is important to question whether there is a genuine redundancy situation. This could be a business closure; workplace closure, or due to a diminished requirement for particular work. If none of these three situations applies but a role is made redundant then there may be a potential unfair dismissal claim (by employees with at least two years’ continuous service), for which an employee can claim compensation of up to the lower of 52 weeks’ pay or the statutory cap (£93,878 from 6 April 2022).
DOES COLLECTIVE CONSULTATION APPLY?
If an employer proposes to dismiss 20 or more staff at the same establishment within a 90-day period, then it has to comply with certain collective consultation requirements. This includes consulting with representatives of affected staff and there are minimum consultation periods depending on the number of proposed redundancies. Prescribed information should also be provided to representatives and meaningful consultation should take place, with the aim of finding ways to avoid or reduce redundancies. If collective consultation requirements are not properly complied with, claims for protective awards can be brought, the value of which is 90 days’ gross pay for each affected employee.
HAS A FAIR PROCESS BEEN FOLLOWED?
Individuals have the right to be consulted prior to any redundancy taking place. This should include consultation meetings between the affected employee and the employer whereby the employee is given the opportunity to discuss their particular circumstances, ask questions and make proposals to avoid their role being made redundant.
An employer should also consider whether there is any suitable alternative employment for an employee before confirming that their role is redundant.
No decision regarding the outcome of the redundancy consultation should be made prior to consultation taking place. If the outcome is predetermined, then an employee may have a claim for unfair dismissal.
WHAT MINIMUM PAYMENTS SHOULD BE MADE?
An employee who is made redundant is entitled to receive payments in respect of the following minimum contractual and statutory entitlements:
- Notice pay, up until the termination date. The length of notice is the higher of the employee’s statutory minimum and contractual entitlement;
- Statutory Redundancy Pay (provided the employee has at least two years’ service), which is calculated in accordance with a formula based on age, length of service and pay; and
- Any accrued but untaken holiday as at the termination date.
There may also be entitlements in respect of bonus or equity, depending on the relevant scheme rules in place.
HAS DISCRIMINATION OR HARASSMENT TAKEN PLACE, OR ARE THERE GROUNDS FOR BRINGING AN ACTION UNDER WHISTLEBLOWING LEGISLATION?
The Equality Act 2010 provides protection from being discriminated against on the grounds of certain ‘Protected Characteristics’, including race (including nationality) and religion or belief. If an individual has been harassed, treated less favourably, or subjected to a policy, criterion or practice which puts them at a disadvantage because of, for example, their race or religion or belief (including philosophical belief – which could arguably include anti-war opinions), then they could potentially bring a discrimination claim. There is no minimum service requirement to bring a discrimination claim and, if successful, individuals may be awarded uncapped compensation based on their actual losses, plus an injury to feelings award.
Similarly, if an individual - regardless of their length of service - can demonstrate that the principal reason for their dismissal is the fact that they made a “protected disclosure” (i.e. a disclosure tending to show that the employer has committed some wrongdoing), that dismissal would automatically be deemed unfair and the compensation the individual could receive would be uncapped.
IS A SETTLEMENT AGREEMENT APPROPRIATE?
Many employees in redundancy situations are offered settlement agreements, under which they are typically offered an enhanced payment in exchange for waiving their rights to bring certain claims against their employer. They may also be asked to agree to certain additional restrictions or warranties as part of the package. In order for a settlement agreement to be legally binding, an employee must take independent legal advice before signing.
In these circumstances, a legal adviser would assist the employee with determining whether the package and terms on offer are sufficient and suitable under the circumstances and, where appropriate, advocate on behalf of the employee to negotiate an increased package.
All of the above considerations should be taken into account if an individual’s Russia-related role is at risk. This will assist in ensuring that any potential package is maximised and an individual’s relevant rights are protected and exercised.