Employment Law: A Guide to Restructuring - Be Ready for 2023

This summary is based on Judicium’s Employment Law: Guide to Restructuring – Be ready for 2023 ‘Sofa Session’ from the 7th of December, with our expert Jenny Salero, LLB, LPC. This session focused on considering which process is best to use – restructure, redundancy, or something else; key points to consider and pitfalls to avoid when planning any restructure of redundancy process; and cost implications to bear in mind in a restructure/redundancy situation.

Here at Judicium we have seen a steady rise in queries regarding restructures as schools become more concerned with finances and budget projections moving forward, and subsequently staffing structures.

Polls

Which Process Should My School/Trust Follow - A Restructure, Redundancy or Something Else?

Historically what we have seen when leaders are looking at changes to structures is they jump straight to the need to make redundancies. While this may often be the case, we recommend pausing to think about whether that process is needed.

The legal definition of a redundancy situation is: ‘A closure of a school or a business, a closure of a particular site, or work of a particular kind is no longer required.’

The latter is the most common reason for redundancy within education. For example, a TA that works one to one with a child, who then leaves the school.

Fundamentally, after analysing how a role is undertaken to the extent that the role in its current format is no longer needed, a case for redundancy may arise.

Restructure:

Financial pressures can force an employer to rethink how to utilise their staffing structures differently.

There is no legal or statutory definition of what a restructure is, but essentially, it's aimed at making a school or Trust run more efficiently. As a result of that process of planning and mapping roles, your school may find redundancy situations arise.

NB: Simply a lack of budget or funding is not a genuine reason for redundancy.

Restructures do not solely look at redundancies. They can be utilised to make changes to terms and conditions, create new roles or promote centralising functions to perform in a more efficient way.

When looking at making changes to staffing, many school leaders forget to think about whether the situation could be approached, not as a restructure, but as a change to terms and conditions.

It is possible to agree changes to roles with staff through an informal discussion, without the need to have a full business case or period of consultation.

Provided you’re acting within the parameters of the law, you can agree to make changes to anybody's terms and conditions with their consent, e.g., changes to job titles, hours, teaching subjects, working patterns, etc.

It's not always possible, but if you can reach agreement, it can save time, be more pleasant for the staff involved, and potentially it can save jobs while creating the same result. For example, agreeing a reduction in working hours by one working hour across the week could lead to the saving of a role or roles. Recently, one of our clients has successfully made this change in relation to their Midday Meals Supervisors.

Common Pitfalls

1. Don’t forget about your staff who are not present in school.

When you are mapping out and making plans for restructure, redundancy or change of terms and conditions, the first potential pitfall is forgetting about the staff you can’t see.

For instance, the people who are not in school because they’re absent on sick leave maternity leave, adoption leave, or shared parental leave.

In redundancy situations where staff are absent on family friendly leave there are special provisions that protect those members of staff. This needs to be factored into your planning.

Also take special account of staff members on long-term sick leave, particularly where this absence is due to a disability. You do not want to fall foul of an unfair dismissal claim or a potential discrimination claim.

We recommend starting with a map of the staffing structure including what you have now, who is in which post, their roles, but also what their actual duties are in school as these may differ from their formal job title and the posts you are hoping to create. This way you should avoid inadvertently missing someone from the process or including someone who should not be involved in the process.

2. Allow ample time and factor in delays or missed meeting dates – especially if looking at changes for teaching staff.

If you're thinking about a restructure to come into place from the first of September, now is the time to start planning and working on your business case.

NB: Our Employment Law team are offering a CPD accredited training session the 19th of January at 9.30am on planning a restructure/redundancy. For more information visit: https://www.judiciumeducation.co.uk/training/a-guide-to-planning-a-restructure-redundancy-process

You can start by putting together a draft timeline, reviewing your policies, updating job descriptions, and if there are new roles, drafting job descriptions or person specifications.

All of this takes time, and we cannot emphasise enough how important it is to invest the time in the planning stages.

If you do proceed to formal consultation with staff, if you haven't spent time planning and mapping things out properly, there'll be a lot of difficult questions you're unable to answer.

Similarly, if you are looking at redundancies or moving people into new posts, you should know how you are going to select people, what process you’ll use, and in certain circumstances, how you are going to support staff. For instance, you might have staff who haven't been for an interview for years or even decades. Are you going to offer any extra support or guidance for them during the process? Allow plenty of time to take all these elements into consideration.

For redundancies that may impact on teaching staff, if you are following the Burgundy Book (or your contracts require notice to be given in line with this), the process and the notice (not factoring in an appeal) needs to be completed by the 31st of May in order for the new structure to come into place from 1st of September.

If you miss that deadline, the organisation will have to pay the individual to the end of the next notice period, which is the 31st of December, causing additional and unnecessary costs.

Alternatively, with support staff there isn't a resignation deadline in the same way as teachers, but you don't want notice periods rolling into the new academic year, increasing your costs. The maximum notice support staff may be entitled to (unless your contracts provide for more) will be in line with the statutory minimum. This is one week for each complete year of service, up to a maximum of 12 weeks.

Therefore, if you do have longer serving members of support staff that may potentially be impacted it is a good idea to work towards a 31st May deadline too. This will allow any period of notice to run between June and the end of August.

Also factoring buffer time for missed meetings ensures you won’t be forced to delay serving notice.

3. Calculate costs before you make an announcement to staff.

We sometimes see schools who have spent a long time on a business case, only to find out their plan is not financially viable.

Before you announce any restructure or proposal to staff and spend a huge amount of time on drafting a business case, make sure you calculate costs as part of your planning process in the event of redundancies. These costs might mean you need to change your plans, depending on the staff involved.

An Overview of Costs

In all situations where a redundancy arises, staff will be entitled to the greater of their contractual or statutory notice. If you are following the Burgundy Book, you must always take into account resignation deadlines when calculating notice.

For support staff it will be the greatest of their contractual or statutory notice and statutory notices one week for each complete year of service up to a maximum of 12 weeks, as noted above.

In the event of a redundancy, staff will also be entitled to a redundancy payment, which is based on their age and length of service. Generally speaking, staff are only entitled to a redundancy payment if they have more than 2 years of continuous service with an employer.

However, in the education sector a further complicating factor is the Modification Order, which applies to all education establishments unless you are an independent school. Under this order the employer must consider continuous service with all schools (bar independent schools) in calculating redundancy payment, e.g., a staff member has been at your academy for one year but has worked for 19 years at school in your LA. You would be required to take into account the 19 years of continuous service at the previous role when calculating their redundancy payment.

To determine pay estimates you can work with your HR provider.

You may also have a historical policy that enhances upon statutory requirements so always check your policy, if you have one in place.

However, the Modification Order can also be of benefit where an employee successfully obtains another role. The Order makes clear that if an employee is offered another role during their notice period, with another Modification Order Body (i.e. any school that is not an independent school) which will start within one month of their proposed redundancy, they are deemed not to be made redundant. In this situation no redundancy payment will be due.

A final and usually the most expensive cost to factor into your estimates, are pension strain costs. These are only payable to support staff that have been members of the Local Government Pension Scheme for more than 2 years and are aged over 55 at the date of redundancy. The stain costs are essentially a top up to the pension the employee has accrued to the date of the redundancy, to allow the employee to take this pension sum over a longer period i.e., the age at which the individual would be able to take their state pension. Often these payments are very costly and may lead to a rethink of the original plan, which is why we would suggest these estimates are obtained as early as is possible.

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