We’ve heard all about quiet quitting, but some companies are now using underhand techniques or ‘quiet layoffs’ to ‘coax’ employees into leaving their jobs, thus avoiding redundancy. Maria Hoeritzauer explains why this can be fraught with risk.
According to March figures from the Office for National Statistics, redundancy rates are close to pre-pandemic levels. But some employers are reportedly taking another approach to making staff redundant, and actively encouraging some employees to resign by using ‘blame games’ or ‘quiet layoffs’.
Google is among the big names reportedly using such techniques, which describe what happens when a manager gradually coaxes an employee to quit their job by creating a hostile and unsupportive working environment, or advises that they need to find another job themselves within an organisation with no additional support.
These contrast with the openly ‘loud layoffs’ seen at firms such as Twitter and Amazon which have attracted significant media attention and public discussion.
Risky business
In the UK, encouraging employees to resign, whether because a manager targets low-performing employees or by creating a hostile working environment, is fraught with risk.
Such employees are more likely to take extended periods of sickness, raise grievances and, if they resign and have two years’ service, claim constructive unfair dismissal.
Redundancy issues
If the manager’s behaviour is related to a protected characteristic for example, such as disability or sex, or other factors such as their working part-time, whistleblowing or raising health and safety concerns, the employee could also have an automatic unfair dismissal claim which does not require two years’ service.
Managing underperformance
If an employee is not performing or their conduct is unacceptable, the employer must use the employer’s capability and disciplinary procedures with a view to resolving the issue or, if that is not possible, result in a fair dismissal.
If they try to use the redundancy process to deal with performance or conduct then a tribunal may decide this is not the real reason for dismissal and declare it unfair and potentially uplift compensation by 25% if the Acas code has not been complied with.
If an employer needs to reduce headcount or close all or part of its activities, this is a potential redundancy situation. Just because the work is still being done, provided it is not being done by a new employee, does not prevent it being a redundancy.
If they try to use the redundancy process to deal with performance or conduct then a tribunal may decide this is not the real reason for dismissal
A fair procedure includes the selection of roles/pools of employees at risk of redundancy, applying fair and objective selection criteria (which can include for example poor sales results if easily measurable), informing and consulting with employees at risk of redundancy and, if applicable, with their recognised union/elected representatives.
Consultation
Consultation should take place before a final decision has been made on making staff redundant and to consider whether there are alternatives to redundancy, and, if not, identify suitable alternative employment opportunities.
Although not a legal right, it is considered part of a fair process to allow the employee to be accompanied by a work colleague or trade union representative.
Consultation meetings could be held virtually, particularly for hybrid or remote working employees. It is important to remind employees that only they and their companion should attend and that the meeting should not be recorded by them without the employer’s agreement.
There is no mandatory consultation period for redundancies where 19 or fewer dismissals are proposed within 90 days, but a minimum of two weeks is typical.
In contrast, mandatory collective consultation of 30 days (or 45 days if 100 or more) apply where 20 or more employees are at risk of redundancy at one establishment within a 90-day period and consultation must be held with recognised unions or if there are none, elected representatives.
There are also reporting obligations to the secretary of state with personal liability for statutory directors if this is omitted.
Failure to conduct collective consultation can result in a protective award being made to all affected employees of up to 90 days’ actual pay for each affected employee made redundant.
Redundancy payments
Once redundancy is confirmed, employers are legally obliged to provide a statutory redundancy payment calculation (it is still an offence not to do so – punishable by fine).
There may also be a contractual right to an enhanced redundancy payment, or the business decides to enhance – in which case consider a settlement agreement.
If an employee works their notice period, the effective date of termination for calculation will be the employee’s last day of employment.
However, if the employee is paid in lieu of notice, the effective date of termination will be the employee’s last day of employment plus their statutory notice period. This could increase their statutory redundancy payment.
Departing employees should be reminded of their ongoing duties of confidentiality and post termination restrictions (if the latter applies), and the need to return company property.
Although most contracts state the cost and burden of this falls on the employee, many employers find that those working remotely may be resistant and it is easier for the employer to arrange a courier and make enhanced payments dependent on receipt of equipment.
Finally, keep a paper trail showing the whole process from the business decision, selection of roles/pools to consultation.
Many contracts will say that notice of termination must be in writing and the employer should ensure there can be no dispute as to when notice of termination was received by the employee, as this can affect the termination date and, if applicable, the date for submitting a tribunal claim.
Accordingly, employers should ensure the employee receives the notice of termination and confirms receipt.
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