Employment Law: Business Restructure and Changes Options
Whether you are looking to restructure a team, reduce headcount (redundancy), change your office location, or buy or sell a business, we can help you through the options available, the risks and practicalities.
Reduction to the workforce
If you are looking to reduce the number of your staff, a redundancy situation occurs and you will need to be aware of the obligations to warn staff, complete an objective selection process and consult. Staff with two or more years of service who are found to have been unfairly dismissed for redundancy are entitled to the following:
- A tribunal award:
(i) a basic award calculated based on age, length of service (up to a maximum of 20 years) and capped weekly pay (currently £571)
(ii) a compensatory award capped at the lower of 52 weeks gross pay or the statutory award (currently £93,878).
It is therefore essential that you follow the correct process.
You may need to relocate to a new office. Whether your employees are obliged to move will depend on the terms of their employment contract. If the contract allows your employees to relocate, you should consult fully with them about this. If there is no provision, a relocation may still be possible, but a careful consultation will be required. It is important that you follow the correct steps to avoid a breach of contract or unfair dismissal/ redundancy claim.
Change of contract
If you need to change contractual terms, you should always consult and agree any changes directly with your employees if possible. Where agreement cannot be agreed, you could consider unilaterally changing the terms by terminating the contract and rehiring under the new terms. This approach however is high risk and should be as a last resort as there is risk of claims against the business.
Sale of the business
If you are considering a sale of the business in part or whole, there is a chance the transfer will fall under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE). If so, as a seller, you will be required to inform and consult staff about the proposed transfer and to provide information to the buyer. It is important that you are aware of your obligations as a seller under the Regulations and that you follow the correct steps. If you fail to carry out the correct steps your employees could make claims against you in the employment tribunal.
If you are considering changes to your business, please contact Jo Cullen, Head of Employment on Josephine.Cullen@edslaw.co.uk or 020 8475 7401 for an initial discussion or to book an appointment.