Mass redundancies, especially in the tech sector have recently hit
the news.
Twitter announced that thousands of jobs would be going after Elon
Musk acquired the company and Meta have recently announced approximately 11,000
jobs going.
Large tech companies like these have a worldwide workforce who
operate in numerous legal jurisdictions. That is likely to mean that many
different laws could apply depending on where employees are employed. The laws
on redundancy could even vary from state to state in the US.
In the UK there are specific rules that employers must follow for
a redundancy to be legal.
UK employers must establish a clear business case for
redundancies. That could be, for example, because trading has reduced, or new
technology has been bought in.
They must then consider alternatives to redundancy such as moving
staff, shortening hours or part-time working.
Then they must create a fair process for selecting individuals who
may be made redundant. In that they must guard against discriminating against
anyone, particularly on specific grounds such as age, sex or race. This can present
challenges for employers because it is possible to discriminate indirectly.
For example, the age old “last in first out” saying to describe a
redundancy approach, could be found to be discriminatory against younger
workers who tend to have shorter service. Therefore, it could indirectly amount
to age discrimination.
Employers must also consult with their workers about the
redundancy process. That consultation should include matters such as
alternatives and the process for selecting employees for redundancy.
Depending on the number of employees affected there are prescribed
time limits for the consultation, and it is not possible to legally make people
redundant until those limits have been passed.
All of these are reasons why, especially with large employers, it
would be unlikely that a mass redundancy process could legally be completed in
relation to UK employees within a few hours or a few days.
It appears that Twitter, for example, are aware of that because
reports suggest they are inviting employees to nominate consultation
representatives.
It may be that international companies, could try to argue that an
employee is employed in a jurisdiction where the rules are less stringent even
though they may live in the UK, for example. The courts or Employment Tribunals
would have to determine which jurisdiction, and therefore rules, applied. It
may be that any disputes around the circumstances and legality of any
redundancy process involving international companies will involve these
jurisdictional issues. So, if an employee lives in the UK but is employed by an
Indian company, say, does UK or Indian law apply?
There may also be issues around whether someone is an employee or
a self-employed contractor. In the gig economy and some sectors, self-employed
contractors are not unusual. The protections open to employees are not
necessarily open to the self-employed contractor. But sometimes it can be
difficult to determine if someone is genuinely self-employed or is really an
employee. Again, the courts or Tribunals may need to look at that and make a
determination in a redundancy situation.
Even if someone is legally made redundant there are certain
entitlements, such as to prescribed redundancy pay and a notice period, that a
UK employer must provide.
The application of the law relating to redundancy, entitlements
and other linked issues, can be complex for employees and indeed employers. If
you find yourself in this situation you may want to get legal advice and you
can use our website to find lawyers specialising in employment law at search4legal.co.uk.
Alternatively, you may want to read some of our other employment guidance
blogs, such as "Am
I an employee and what are my employment rights?" or "I think I have an
employment case".