Many groups of businesses are having to make cuts to adapt to the new "credit crunch" realities. A recent decision against JJB Sports emphasises the need to take good advice and be very careful when making redundancies.
The company tried unsuccessfully to claim that each of its stores was a separate workplace. As a result it argued that it did not need to give 90 days notice of redundancies, a claim the tribunal rejected.
UK law imposes much greater restrictions and longer time scales on companies that wish to make large scale redundancies, specifically 20 and 100 redundancies are the break points.
Every case needs to be considered carefully, but groups like JJB with centralised controls and very tight reporting structures are more likely to be viewed as one establishment for this purpose, than companies who operate their subsidiaries very independently. Independent accounting and real local decision making are key, but not conclusive, indicators.
If this was not bad enough, tribunals are beginning to view a redundancy programme as being much wider than job losses. Where employees have their job restructured, are transferred or even have their salary altered, they can be counted as part of the 20 or 100 affected by 'the redundancy'. Tribunals are trying to make sure employers do not duck their responsibilities.
In case companies believe it is irrelevant, the cost of getting it wrong can be costly in terms of time and money. All this when companies are trying to survive. In JJB's case, they have had to pay at least 65 days of salary to more than 100 employees who lost their jobs - quite a bill not budgeted for.
Key points
- Each site may not be considered a separate work place establishment
- If you are making 20 or more redundancies 30 days notice is required
- If you are making over 100 redundancies 90 days notice is required
- Redundancies may not necessarily mean job losses
- Take legal advice before any redundancy or restructuring programme to be sure
