Royal Mail redundancies: How to conduct a fair process

[TrueBlueTerrier]

https://www.personneltoday.com/hr/royal ... y-process/

With Royal Mail recently announcing thousands of job cuts, it will need to follow a fair and thorough process to reduce the risk of employment tribunal claims. Susan Thompson and Andrew Czechowski outline what this will entail.

Royal Mail plans to cut 10,000 full-time equivalent roles by August 2024 to streamline its business, which it calls “rightsizing”. To achieve this, it will need to ensure it follows a lawful redundancy process to avoid receiving a wave of employment tribunal claims.


Redundancy is one of the five potentially fair reasons to dismiss an employee who has more than two years continuous service. However, the redundancy has to be genuine and a fair redundancy process must be followed.

There are three common reasons for redundancy: business/workplace closure or change of location; a reduced requirement for work of a particular kind, and business reorganisation. In Royal Mail’s case, it has a reduced requirement for work of a particular kind as it is delivering lower volumes of letters and parcels than in recent years.

The company has blamed strike action for inflating its losses and has projected they could rise to £450m if customers turn to rival businesses because of the disruption.

It is likely given the backdrop of industrial action that this will be a highly charged redundancy process that may lead to several employment tribunal claims being submitted. This is particularly the case since the Communications Workers Union is actively involved.



Redundancy consultation
When conducting a redundancy exercise of this size, Royal Mail will also need to be mindful of its legal obligations to consult collectively on its proposals in addition to its obligations to consult with each individual employee.

The obligation to consult collectively arises when an employer is proposing to make 20 or more employees at a single establishment redundant within a period of 90 days. Consultation must begin in good time and commence at least 30 days before the first dismissal takes effect (at least 45 days when more than 100 employees are being made redundant).

An employer must collectively consult with either a recognised trade union if there is one, or elected representatives of those employees ‘at risk’ of redundancy. Certain information is required to be given to the trade union/elected representatives and consultation must be undertaken with a view to reaching agreement on matters such as avoiding the dismissals, reducing the number of employees to be dismissed and mitigating the circumstances of the dismissals.

In addition to their collective consultation obligations, the employer needs to ensure that they also comply with their individual consultation obligations. A common mistake made by employers is that they become so focused on their collective consultation obligations that they fail to consult individually with employees. Individual consultation will include, for example, explaining to each individual the reasons for the redundancy, why they have been selected, and exploring if there are alternative employment opportunities elsewhere within the organisation and associated employers.

Redundancy notice periods
A common mistake made by employers is that they become so focused on their collective consultation obligations that they fail to consult individually with employees.”

Once an employer has established who to make redundant, it will need to ensure that those employees are given notice. The length of the notice period should be in an employee’s contract of employment. However, employers need to bear in mind that an employee has a statutory right to one week’s notice per each year of service, up to a maximum period of 12 weeks’ notice for 12 or more years’ service. For example, if an employee has a contractual notice period of 4 weeks, but has been employed for 10 years, the employer must give the employee 10 weeks’ notice to terminate.

Consideration should also be given to whether an employer makes a payment in lieu of notice (if the employment contract allows), rather than to have the employee work out their notice period.

In addition, employees who have two years’ service or more are entitled to receive a statutory redundancy payment. The amount of pay which an employee is entitled to depends on their age, length of service and salary.

Redundancy settlements
An alternative strategy to be considered is whether to offer settlement agreements to outgoing employees, known commonly as “enhanced redundancy packages”.

To offer enhanced terms, an employer will need to have protected conversations with the employees and offer enhanced terms on a without prejudice basis. In return, employees will be required to waive their employment rights and to settle any claims they may have against their employer.


It is unusual, however, for employers undertaking a redundancy of this size to offer settlement agreements due to the expense of the process. Royal Mail is highly unlikely to offer enhanced terms due the state of their financial position. Indeed, it has announced that it is unlikely to be able to afford to pay the historical redundancy package of up to two years’ pay to staff.

Before embarking on a redundancy exercise, employers should make sure they aware of their legal and contractual obligations. This will minimise the risk of employment tribunal claims from employees who feel the employer did not follow a fair procedure.

[matthew68]

How much will Thompson get?

[claystones]

The fairest process would be to give us the same terms as the managers had a few months ago and probably will have in the future

[gimba]

Its always done in seniority, so I should be the same, the oldest longest serving first out

[heraldmoth]

Doubt seniority will matter, nothing else has

[goneaway]

It doesn't mention in the piece copied and pasted that the authors of the piece both work for a firm of solicitors called Simkins. Surprise, surprise, Simkins are on Royal Mail's legal panel:

https://www.simkins.com/news/royal-mail ... egal-panel

[fallenworld2022]

im sorry but no one is going take 12 weeks, thats a bad joke

[RobertT]

im sorry but no one is going take 12 weeks, thats a bad joke

That's the notice period, not the redundancy terms!

[tractorboy2]

im sorry but no one is going take 12 weeks, thats a bad joke

That's the notice period, not the redundancy terms!

Seems too also refer to compulsory redundancy. Is there something missing from that though?
I thought if you were being made redundant, and working a notice period, you were entitled to time off to look for alternative employment.

[rambo1]

im sorry but no one is going take 12 weeks, thats a bad joke

You'd be surprised, if you were going to leave anyway, wouldn't you take £6k?

[Jefferson Starfish]

im sorry but no one is going take 12 weeks, thats a bad joke

That's the notice period, not the redundancy terms!

Seems too also refer to compulsory redundancy. Is there something missing from that though?
I thought if you were being made redundant, and working a notice period, you were entitled to time off to look for alternative employment.

Never heard of that to be honest.

[Jefferson Starfish]

im sorry but no one is going take 12 weeks, thats a bad joke

You'd be surprised, if you were going to leave anyway, wouldn't you take £6k?

I'm planning on going next year and would like a nice bonus for doing so. But £6k is less than half of what I'm legally entitled to.

[rambo1]

I think we'd all get what we'd be legally entitled to....but probably no more.

[Jefferson Starfish]

I think we'd all get what we'd be legally entitled to....but probably no more.

They're proposing a max of 9 months pay, which is more than the legal minimum. For me anyway.

[mags999]

i would expect that to be improved a fair bit due to these intensive talks taking place next week lets hope for at least a years pay