Most employees we see are people are being made redundant. The reason they have lost their jobs are sometimes disputed, but usually involve either
- External factors: changes in the market that impact the company; or
- Internal factors: reorganisations of the workforce, whether or not following a merger or acquisition.
Each person's redundancy is different , and so is
the reaction. A notice of potential redundancy, or an actual
dismissal, is often
received with resentment or anger, along with a sense of
injustice,
maybe at the way the company had conducted its business, or how the
particular selection for redundancy was made.
A compromise agreement can limit the sense of loss, rejection and sometimes even betrayal felt when staff are made redundant. Even if you are in fact happy to leave there could well be problems that have built up over the years.
Money doesn't cure
everything, but one great advantage of a compromise agreement is that
all the issues can be covered, and using an
experienced independent adviser ensures you have the chance to make
sure the employer hears your concerns before it is too late.
Disability
Although most Compromise Agreements
concern
redundancy or other dismissal, that isn't always the case. One of the
first compromise agreements we negotiated was for Kieran (name changed)
who suffered from a disability, namely severe claustrophobia.
Disability doesn't have to mean physical handicap, and Kieran was unable to cope with staying any length of time in a confined space, including trains, especially the underground. Not being able to travel where he wanted definitely affected how and where Kieran could work.
He
was fine working for a company with offices within walking distance of
his home. His troubles began when his employer was bought by a business
in the City. The new owners valued his contribution to the business and
wanted him to come and work at its City office. Kieran could have
refused to relocate, because his employment contract only required him
to accept moving to a new workplace within 20 miles, and his new office
was over 25 miles away.
But the pay was good and he liked his job, so he agreed with the new
owners he would give it a go.
Disaster!
The underground made him ill, and after trying to make the journey
overground via British Rail he collapsed among the commuters at
Liverpool Street station. His new employer saw this couldn't go
on and accepted Kieran would have to leave. He was treated with
understanding and we were able to negotiate a generous settlement even
including compensation for a missed bonus payment for a project Kieran
would never be able to complete, and for the cost of the season ticket
he would never be able to use.
After several drafts we were able to cover all the angles and
Kieran was delighted with the outcome, which tidied up the tangled
problems
of an employment transfer under "TUPE", and a possible
discrimination claim (his claustrophobia could have been classed as
discrimination).
Kieran's new employer wanted to help, but had the sense to insist that any agreement with an employee that was out of the ordinary was recorded in a Compromise Agreement. As so often, Compromise Agreements delivered a win - win for both parties.
Taking voluntary redundancy
Asking for voluntary redundancies from staff is sometimes used to allow people to leave, meaning employers delay the harder task of choosing who will have to be make redundant. But this is a blunt tool, often leading to the best people choosing to leave (and being paid to go).Compromise Agreements are often used in that sort of voluntary redundancy, but can be used in more creative ways to suit both parties.
Voluntary redundancy can help employees who are trapped in jobs that no longer satisfy them. In the right situation, with a supportive line manager, a voluntary redundancy will meet the needs of both employer and employee.
Why would the employer pay his staff member to leave if he could simply dismiss the employee as redundant? Or, why doesn't the employee just resign?
Frequently what happens is the employee sees that there are better ways for his job to be done than by keeping him in place. He sees his position could be made redundant before his employer does - no wonder he isn't happy in a job he thinks is pointless. But unless he has a new job lined up he may not want to hand in his notice and risk a period of unemployment.
This
is where the compromise agreement comes in to provide for voluntary
redundancy along with a structure hand over of responsibilities from
the leaver to whoever will take on whatever parts of his role still
need to be done. We
have
been pleased to be involved in this process at some
major accountancy and law firms, as well as international architects and publishers.
Selection
One of the most sensitive aspects of a redundancy process is the selection of the correct people to be made redundant. Professional advisers at City institutions will brief their clients on the need for notice, meetings, consultations, and agreed selection criteria.But objectivity is hard to prove. We have seen clients complain to us they have been discriminated against because of their age or colour, or maybe they were chosen because they were the cheapest person to get rid of.
No wonder City institutions almost always want redundant staff to sign Compromise Agreements. The extra cost is trivial compared with the legal fees and management time required to contest a Tribunal claim.
Whether you are an employer or an employee, you can get fast objective advice from someone who has looked at these issues for years at Guy Thompson & Co.
Call us now on 020 7274 6874 or 07 775 944 363 today, or send an email to contact@citycompromiseagreements.com.