Questionable redundancy practices

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bish123

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A friend works for an IT company which is going through restructing. A very large number of associates are being told recently that they are directly impacted and expected date of departure. In his case the dates proposed are for next year. It has created huge uncertaincy for him as he knows there is no long term future in that company. So he has two options - live in mental anguish for another year or start looking for opportunity else where. There is no voluntary redundancy so if he resigns before his departure, he gets no severance package.

Has anyone come across similar practice before ?
 
There is no anguish here. Just hang in there, get redundancy next year ( lots of people dont get that). In the year between now and then start working with a career coach, saving to take time off, talking to agencies etc. I'm not sure why this is a problem?
 
Yes it happens, I have been through similar process myself.

Is the voluntary redundancy worth sticking around for?
And is it confirmed he will be one of those restructured?

If so, use this to his advantage. There should be scope to discuss with the company time off for interviews, making sure a reference is put on file available. In 18 months time he may be in a great situation, where he is in a better position (either in pay or hours) and has the package.

The real uncertainty \ anguish is if you're unsure of whether you will get the package. But you can see which way the company is headed and have to decide whether to jump ship or hope for the package. It won't be the same company post restructuring, staff may have extra\different duties, so even if happy in current role no guarantee things will continue like that.
 
odyssey06 said:
Yes it happens, I have been through similar process myself.

Is the voluntary redundancy worth sticking around for?
And is it confirmed he will be one of those restructured?

If so, use this to his advantage. There should be scope to discuss with the company time off for interviews, making sure a reference is put on file available. In 18 months time he may be in a great situation, where he is in a better position (either in pay or hours) and has the package.

The real uncertainty \ anguish is if you're unsure of whether you will get the package. But you can see which way the company is headed and have to decide whether to jump ship or hope for the package. It won't be the same company post restructuring, staff may have extra\different duties, so even if happy in current role no guarantee things will continue like that.
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Yes, his name is mentioned in directly impacted.
Uncentaincy is related to the opportunities he might have from now to the time of his departure. He has specific skill set and worried if he may or may not get suitable job when made redundant next year. On the other hand if he keeps trying for next one year - it's likely he will land into similar job.
 
bish123 said:
Yes, his name is mentioned in directly impacted.
Uncentaincy is related to the opportunities he might have from now to the time of his departure. He has specific skill set and worried if he may or may not get suitable job when made redundant next year. On the other hand if he keeps trying for next one year - it's likely he will land into similar job.
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It sounds like he needs to start looking now unfortunately at the risk of foregoing the package - unless the package is so generous he could still come out ahead even with a medium length gap in employment. If it is a very niche role, he may want to get to the market ahead of the other associates if they could be competing for same role.
 
odyssey06 said:
There should be scope to discuss with the company time off for interviews, making sure a reference is put on file available.
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But in doing this he is showing his cards to the company i.e. he is considering going without the redundancy payment. If they see this it may well be playing into their hands and they will hold off on letting him go and bide their time to save on the payment. Best to keep your cards close to your chest because interviews can be arranged outside on time off or outside of office hours depending on his level or experience.

Probably also depends on how big the payment is going to be as mentioned above.
 
Sue Ellen said:
But in doing this he is showing his cards to the company i.e. he is considering going without the redundancy payment. If they see this it may well be playing into their hands and they will hold off on letting him go and bide their time to save on the payment. Best to keep your cards close to your chest because interviews can be arranged outside on time off or outside of office hours depending on his level or experience.

Probably also depends on how big the payment is going to be as mentioned above.
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Yes of course, re: the time off for interviews, references I meant in the notice period once he has been notified of redundancy.

Hopefully the company will give several months notice given the process and the employee would be able to use this as a window of opportunity.
 
In fairness, employers can't always win. If they give too long a period, they get criticised and if it is rushed and too short, they get criticised. I would have thought the fact that it is next year implies that they have lost a contract somewhere and it may be worth him asking whether or not there are any options for TUPE into any new provider if that is the case.

It really comes down to if it is worth his while hanging around for whatever package comes up and for whatever support mechanisms his employer gives as well. An alternative way of looking at it is that he now has got 12 months+ to upskill and train
 
This is very common. Instead of second guessing, he should talk to HR. Say he knows he is going to be let go in the near future. It's obviously difficult to time leaving one job and get another and a new employer probably won't wait. If he gets a new job before the official redundancy date, can he still get his package.

Anything else is just second guessing and a year is a long time to wait.
 
Having gone through redundancy several times, I don't really see what is the issue there. Yes, the situation creates stress but is it not always/most of the time the case with redundancy?
So instead of being given a few weeks for the process, he has been given months. I would say it is in some way an advantage.
His options are really dependent on the package and the level of risk he is willing to take.
 
Is he in a trade union? If not, they should consider joining a union.

Has he been told what the package is? Is it worth hanging around for?

Isn't there supposed to be a consultation with employees for any large redundancy?

The terms could be agreed e.g. that the package is available from now for anyone who wants to go before their scheduled date.

Is he sure that there is no future? Companies' plans change. They can be hiring one year and firing the next and vice versa.

Does he enjoy the work he is doing?

He can always suss out the market and not accept any offer unless it is overwhelmingly good.

His employer will know that most of the employees are looking anyway.

Brendan
 
Brendan Burgess said:
Isn't there supposed to be a consultation with employees for any large redundancy?
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Yeah, there's supposed to be a minimum of 30 days before the formal notice is issued to individuals affected. While they could identify affected departments, I didn't think they could identify the chosen individuals prior to the formal notice.

12+ months notice is also very unusual and could create problems for the employer.
 
bish123 said:
It has created huge uncertaincy for him as he knows there is no long term future in that company.
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Many companies come back stronger after a restructuring. A lot will depend on the company involved, but some of the ones announcing significant layoffs have strong fundamentals, but hired aggressively to meet demand that spiked during Covid. They will survive a recession by scaling back and expanding again as the market recovers. Indeed, restructuring like this can create opportunities for advancement for someone with the skills and motivation to take advantage.

bish123 said:
So he has two options - live in mental anguish for another year or start looking for opportunity else where.
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Living in anguish would be a personal choice, there is no need to do so with such advanced notice of a potential redundancy. Not all of the IT market is equally affected by the major layoff announcements and many are continuing to recruit. Where I work is still hiring and there's still competition for good candidates. We're being asked to reach out to contact in firms announcing layoffs to encourage applications.
 
If it were me I would quietly go about getting another job now, probably even if the package might be quite substantial and very likely. I wouldn't let the prospect of redundancy act as golden handcuffs to the current job.
 
Leo said:
Yeah, there's supposed to be a minimum of 30 days before the formal notice is issued to individuals affected. While they could identify affected departments, I didn't think they could identify the chosen individuals prior to the formal notice.

12+ months notice is also very unusual and could create problems for the employer.
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He hasn't be served notice but given heads up in open forum that he will be leaving next year. It seems they are nudging employees to find alternate options and resign when ready, which will happen in many cases. Can this practice be challenged legally ?

Agree, companies go through redundancy and hiring again. I have also seen people being hired again in similar roles but with reduced packages.
 
bish123 said:
He hasn't be served notice but given heads up in open forum that he will be leaving next year. It seems they are nudging employees to find alternate options and resign when ready, which will happen in many cases. Can this practice be challenged legally ?
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If they're in trouble then those with good job prospects and skills in demand (e.g. IT) should probably just get going. But the way that you describe it there sounds like potential constructive dismissal. But maybe the employer thinks that they're being helpful. Difficult to tell. And who wants to take an employer to task at the WRC or whatever when they could be getting on with their life?
 
bish123 said:
He hasn't be served notice but given heads up in open forum that he will be leaving next year. It seems they are nudging employees to find alternate options and resign when ready, which will happen in many cases. Can this practice be challenged legally ?

Agree, companies go through redundancy and hiring again. I have also seen people being hired again in similar roles but with reduced packages.
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Firstly and legally, people don't get made redundant, roles do, It is not uncommon to see people leave with a package and be rehired in a different role a number of months later. Indeed, I know one person who actively and successfully pursued such a strategy. It's also perfectly legal to make someone redundancy from one role and rehire them but it is riskier in that they could claim that the initial redundancy was flawed.

As for "nudging" people, it depends on how it is done and a "caring employer" could badge it as trying to take care of their employee careers and helping them to seek new challenging opportunities etc etc. If they are doing it right, it would be a hard case to prove constructive dismissal. However, the bigger issue for those who remain behind waiting for a package is that someone still has to pick up the roles and responsibilities of those remaining as I presume they are not hiring.

Bear in mind as well that whilst redundancy is a cost to a company, it gets amortised over a number of years and badged as " restructuring" costs and can be offset against the salary savings they make so cleaver accountants and management can turn it into a positive spin in terms of financial results
 
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