Ticket office closures: redundancy and suitable alternative employment
When does a redundancy situation arise and what obligations does an employer have?
Redundancy is one of a limited number of potentially fair reasons for which an employer can dismiss an employee. A redundancy situation can occur in three types of situations:
- when a company closes or intends to close all or some of its business operations;
- where a particular place of work is closed; and
- where there is a diminished requirement for employees to carry out a particular type of work
The rail industry proposals therefore fall into the definition of a redundancy situation, as there is a reduced need for employees to carry out a particular type of work, the business rational being that change is needed to modernise the railways and meet customer demands. It is reported by the Rail Delivery Group (RDG) that only 12% of tickets were sold at ticket offices in 2022, with the rest either purchased online or from vending machines.
It will be interesting to see how the ticket office proposals progress. Rail companies are required to consult London Travelwatch and Transport Focus and provide passengers with the opportunity to have their say on the proposals. As a result, a public consultation on the proposals has taken place, with the consultation window having closed on 1 September 2023. It is reported that 680,000 people responded to the consultation. Over the coming weeks, the train operator proposals and public consultation responses will be analysed by Transport Focus and London Travelwatch who will then provide a response to the train operators and publish the responses online along with the main issues raised in the consultation by 31 October 2023.
If the train operators are allowed to proceed with the current proposal, it is not enough for there to be a genuine redundancy situation if unfair dismissal claims are to be avoided. For a dismissal for redundancy to be fair, an employer must also act reasonably, which in practice means following a fair process. In addition, where proposals could result in the dismissal of 20 or more employees on grounds of redundancy in a 90-day period, collective consultation obligations must be met.
In general terms, to ensure a fair process, as a minimum, employers must warn and consult with potentially affected employees, or their representatives; adopt a fair basis on which to select for redundancy, which means ensuring that the redundancy selection process and the pool of employees from which selection is made are fair and non-discriminatory; and look for suitable alternative employment within their organisation and, if it is available, offer it to any employees provisionally selected for redundancy.
Suitable alternative employment in a redundancy situation
As mentioned above, employers must consider whether there are any suitable alternative vacancies that can be offered to those at risk from redundancy. A failure to look for or to offer such available alternatives, could result in successful unfair dismissal claims against the employer.
It is important that employers take a proactive approach in looking for and offering alternative employment and should not merely wait for employees to seek out vacancies or assume what vacancy an employee may deem suitable. This usually involves sharing vacancy lists with potentially selected employees as part of the consultation process. Employers should also be mindful that the obligation to consider and offer alternative employment exists across the whole entity and not just in one particular part of the business. However, the duty is to seek out suitable alternative employment and does not extend to creating roles that do not exist.
Under the current rail industry proposals, some ticket offices will remain open at the busiest stations, but at the remaining stations ticket offices will close and staff will be offered a new and more flexible role as a mobile customer service team member. It is suggested that these colleagues will be present on the concourse assisting passengers with their travels and selling tickets.
It is likely that rail firms intend these mobile customer service roles to be suitable alternative roles, allowing affected employees to be redeployed and reducing the number to be made redundant. However, further details of how the mobile team will operate are yet to be provided. Without these further details, it is difficult to determine whether these new roles will in fact constitute suitable alternative employment or just alternative employment. The distinction is important, because it is only if an employee unreasonably turns down a suitable alternative role, that this impact their entitlement to a statutory redundancy payment.
Where an alternative role is offered on the same terms as the employee’s redundant role, it is likely to be deemed suitable. Where the alternative role is on different terms, the question of suitability comes into play. Factors that may be taken into account when determining whether a role is a suitable alternative include: hours of the new role, place of work, pay, status and career prospects and the extent to which these differ from the employee’s current role.
If a suitable alternative role exists but the terms are different to those the affected employee currently has, even if the new terms are better, the employee is entitled to a four-week trial period to decide whether to accept the new job.
It is important to remember that there are certain individuals who have priority rights, which means that employers must offer them a suitable alternative vacancy if one is available, and they should be offered this over other employees who are at risk of redundancy. The individuals with these rights are those on maternity, paternity, shared parental leave and adoption leave. These rights have been extended under the Protection from Redundancy (Pregnancy and Family Leave) Act, to cover those employees not just during the period of leave, but also the period from the point the employer is notified of pregnancy, to up to 6 months from the end of maternity or adoption leave. However, to take effect, the Act requires implementing regulations to be brought into force which will confirm the specific details of the extended right. Employers will need to look out for these implementing regulations and bear the extended right in mind when considering future redundancy plans.
Redundancy top tips
Managing a redundancy process is difficult for any business, but we have included a few top tips below to help employers.
- Make sure there is a genuine redundancy situation - employers should make sure the redundancy situation is genuine and that it falls within one of the three redundancy situations mentioned above. Using redundancy as a reason to dismiss, for example, an underperforming employee in order to avoid a lengthy performance management process, is likely to be unfair.
- Effective preparation – to make sure everything runs as smoothly as possible. Preparing a clear business case for the proposed changes, together with a question-and-answer sheet will help managers to be prepared in advance of the first consultation meetings and will also help to allay some of the uncertainty that is common for those affected by redundancy proposals.
- Hold a meaningful consultation process – employers should warn employees of the proposals as early as possible and should consider and respond to all points raised during consultation process before any final decisions are made. It is also good practice to document the process in case of challenge later on.
- Fair selection criteria – employers need to select employees for redundancy in a fair way. The criteria should be based on measurable facts and not based on personal opinions. Some criteria are automatically unfair and you should not select an employee for redundancy based on reasons such as: pregnancy, parental leave, time off for dependants and joining or not joining a trade union.
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