The Consultation Process
Specific Issues Affecting Individual Members
The Consultation Process
Employees and recognised trade unions who are affected by a restructuring where jobs are at risk have a statutory right to be consulted at each stage by management during the restructuring process.
This consultation should extend to cover the proposed new structure and the appointment and/or assimilation of staff into this new structure. For this to happen, staff representatives must be provided with the following documents at the start of the consultation process.
- A copy of the proposed changes and their rationale
- A document setting out the consultation timetable
- The management structure, identified jobs at risk and job descriptions of any new posts
At that point, or very soon afterwards, management should also provide two parallel lists of the jobs and grades in the current structure and the proposed new structure, identifying where it is proposed that staff are to be automatically slotted in, where "pools" of staff may have to compete for posts, and any staff for whom there may not be obviously suitable alternative employment.
They should also provide a copy of the equality impact assessment they have undertaken prior to launching the consultation together with arrangements for commenting on it.
Before the restructuring process begins there should be a formal written procedure to underpin the process of consultation.
Reference documents will be required and should include the employer's redeployment and pay protection procedures, selection panel and interviewing procedures, voluntary early retirement and redundancy policies and Local Government Pension Scheme options.
A timetable of meetings and events, e.g. dates for job adverts – internal and external – will need to be agreed
There should be clear written details of compensation terms available for anyone who may be made redundant. The prime aim should be to avoid compulsory redundancy. Clarification of individual council's policies on this key issue, at an early stage, is therefore important.
During the process as posts in the new structure are filled it is important to proceed hierarchically from the 'top' downwards.
If there are potential redundancies, i.e. where jobs are at risk, employers have a statutory duty to consult trade union representatives and individuals, under the Trade Union and Labour Relations (Consolidation) Act 1992, section 188.
If there are potential redundancies, i.e. where jobs are at risk, employers have a statutory duty to consult trade union representatives and individuals, under the Trade Union and Labour Relations (Consolidation) Act 1992, section 188. The European Directive on 'Information and Consultation in the Workplace' (directive 2002/14/EU) also places employers under a legal obligation to consult with their employees on, among other things, decisions which are likely to lead to changes in work organisation.
Under the terms of section 188 of the TULR(C)A, where 100 or more redundancies are proposed at one establishment within a 90-day period, consultation must begin at least 90 days before the first dismissal takes effect. If the number of jobs at risk are less than 30 consultation must commence at least 30 days before the first dismissal takes effect.
Although smaller specialist unions like The Aspect Group are generally consulted by local government employers on most issues, in some employers full "recognition" is limited to two or three large unions.
That there are two reasons why smaller professional trade unions such as The Aspect Group should be part of the collective consultation to take place under the Trade Union and Labour Relations (Consolidation) Act 1992.
Firstly, The Aspect Group is recognised nationally and indeed has the largest representation of all the unions on the national Soulbury Committee, which the national Local Government Employers (LGE) fully support and participate in and which officially recommends to all local authorities "full recognition of those unions and associations represented on the national body. Such recognition includes the provision of facilities for representatives as accorded to other teaching and non-teaching staff unions and regular consultation with representatives…" (Soulbury Report, 2010, paragraph 11.1).
Secondly, it is in the interests of good industrial relations generally, and the best possible implementation of the requirements of the Act (to reduce, avoid or mitigate the consequences of redundancies) that that voice is heard, and that there is the opportunity for a collective input into discussion on service proposals, so that a significant group of staff with a specific and important function have a collective voice in redundancy discussions.
Your Aspect Group negotiations officer should be informed if there is any dispute about whether smaller unions can take part in consultation on redundancies. We will also support the full involvement of other education unions including teacher unions and the AEP in such consultation. A pro forma (LINK) letter summarising our view can be downloaded HERE
No, other than to remember that our shared interests should be greater than any differences of emphasis. The Aspect Group tends to work closely with the teaching unions and with the Association of Educational Psychologists.
All unions should have a shared interest in a properly-run consultation process which seek to minimise compulsory redundancies and damage to local services, even if they represent particular interests within the workforce as a whole..
If there are specific local problems, you should contact your Aspect Group negotiations officer immediately.
All Local Authorities, and many other employers, will have a 'managing change' document, together with a policy and procedure for handling redundancies. This will contain details of:
- An introductory statement of intent towards maintaining job security, wherever practicable
- The process to be followed
- The purpose and timetable for consultation
- What staff and their representatives can expect to receive
- Definitions of pay protection, suitable alternative employment, slotting arrangements, and assimilation into posts in the new structure
- Arrangements for volunteering for redundancy, and for compulsory redundancy, including redundancy payments
- The implications of taking redundancy on staff pension entitlement
- General guidance on the selection criteria to be used where redundancy is unavoidable
- Notice period rules
- Appeals procedures
- Counselling and assistance to redundant employees
There are six:
- All the key documents must be ready and given to staff at the start of the process not half way through it
- Staff must be encouraged – and given time – to draft responses whether they be questions or the development of alternative ideas
- Management – and unions – must keep staff informed on a frequent basis
- Meetings between management and unions must be minuted and decisions made public
- Senior management staff must be involved at every stage so that those doing the consulting can give answers straightaway and not fudge or avoid questions
- Union reps must have paid time off to attend extra meetings and draft responses, and members must have time to meet with their reps
It is important that a record of relevant meetings should be made available and circulated to all staff.
They must do so in a "timely" manner, as soon as proposals exist but before any final decisions are reached. They must provide trade unions and staff with sufficient information to understand what is proposed, and why and what measures are planned to try to avoid, reduce or mitigate the consequences of any redundancies.
They must ensure trade unions and staff have an opportunity to respond to the consultation and must consider them in a "conscientious" manner. If the consultation is clearly a complete "sham", then the employers run the risk of trade unions seeking a 90 day protective award whereby staff may be paid up to 90 days salary as a penalty for the employer's failure to consult properly.
In addition to consulting the trade union(s) or elected employee representatives, employers must notify the Secretary of State at the Department of Business, Enterprise and Regulatory Reform on a form HR1 of any proposed redundancies involving twenty or more employees at any one establishment in a 90-day period.
Under sections 193 (1) and (2) of TULR(C) A, this notice must be provided before any notice of dismissal is issued. Where between 30 and 99 employees are at risk, this must be sent at least 30 days before the first dismissal takes effect. If 100 or more employees are at risk then it must be sent 90 days before
A copy of the HR1 form should also be given to the trade union(s) or other employee representatives who are to be consulted (s.193 (6) TULR(C) A) at the same time. So receipt of an HR1 form should identify the formal date the consultation commenced.
As professionals, Aspect Group members will have views about the structure of local services. However, as local authorities vary so much in their culture, establishment, financial position and size, there can be no universal blueprint. Our local members will understand the hard realities of local service delivery and their knowledge and expertise should inform the early stance of the Aspect Group local representative. Membership meetings – complemented by local team meetings will assist this process. Managers should help to facilitate this, given the importance of proper consultation and the issues at stake.
Where financial constraints represent the reason for change, they should be supported with clear evidence justifying the scale of cuts and the ability of the new structure to continue to provide key services i.e. to be "fit for purpose".
Staff should also have the opportunity to make their own contribution to the debate in the formative stages of the change programme. This will enable the best ideas to be incorporated. Much will depend on what the employer needs to prioritise and focus on, such as statutory service requirements.
The restructuring process should start with the management submission of a strategic design, supported by hard evidence, to show that a restructuring is likely to retain a sustainable and effective service, including meeting statutory obligations. Two examples of Aspect Group responses can be found HERE and HERE.
Leadership and levels of management responsibility in each proposed tier and for each group of services should be clearly identified in diagrammatic form, and their purpose defined in terms of the aims and objectives of the reorganisation
All posts in the proposed new structure should be presented with a clear and acceptable job description and person specification
Even in these difficult times, any proposed structure should still allow for lateral and vertical career development, and the relationship between posts in each tier should be well defined.
The requirement to reduce and avoid redundancies if possible
The consultation process should explore, in full, alternatives to redundancy. The Aspect Group's top priority is avoiding compulsory redundancies. Depending upon the circumstances, it may be relevant to consider the following:
- Savings in the non-staffing budget
- Staff reductions due to natural wastage;
- Voluntary severance/redundancy;
- Voluntary transfer to part-time work or job share (but only after careful consideration of pensions implications);
- Reviewing or ending the use of agency staff
- Redeployment and retraining to other posts within the authority;
It is unlawful to discriminate against someone on grounds of gender, race, disability, age, sexual orientation and religion or belief. The public sector statutory equality duties go further and can be helpful during redundancies and restructuring. Employers and providers of services are required to "have due regard to the need to positively promote equality": for staff and service users in the areas of race, disability, and sex (including equal pay and transsexual people on the grounds of their gender reassignment) in all their policies and practices. Private contractors who provide public services are also required to ensure gender and disability equality, but only in so far as they provide public services. Any proposals to make staff redundant or to cut services must have a formal equality impact assessment carried out on them by the local authority and this can be used to help ensure members are treated more fairly, and that the local community are fully involved in any proposals. It is possible that some groups of workers may be discriminated against in redundancy situations – perhaps disabled workers, part-time workers, and black workers. Such discrimination may not be intended but is damaging and unlawful nevertheless. Similarly, local authorities may, without intending to, disproportionately affect services to disabled, or black and minority ethnic or women service users, especially in deprived communities. The Equality and Human Rights Commission has issued detailed advice to councils considering restructuring and redundancies on what they must do. You can download this here.
An important legal test case in 2008, ruled that Ealing Council had acted unlawfully in cutting funding to the domestic violence support group Southall Black Sisters, because it had not carried out an equality impact assessment before consulting on the proposals. Some councils do not appreciate that these impact assessments must be undertaken at this earlier stage and not towards the end of the consultation. The community group was supporting a community under-served by mainstream services. Although this case was in respect of race equality the principles apply across the board. You can download it here.
Equality impact assessments can be an invaluable tool within the consultation process both in respect of the impact on the services provided and on the staff who provide them. Aspect Group members will have particular expertise in this field and every effort should be made to ensure they can feed into the equality impact assessment.
You should ensure your Aspect Group negotiations officer knows of this. They can contact the Equality and Human Rights Commission who can issue an enforcement notice on the authority if it fails to comply with its statutory equality duties.
Specific Issues Affecting Individual Members
That depends on what local policy or agreement you have within your local authority. The details are likely to be found within the local "managing change policy." Typical protection levels have been two or three years until recently when some local authorities have forced through changes to reduce protection to as low as one year in some cases.Downgraded staff with a significant salary loss cab invoke a Pension Protection Order which gives protection for up to 10 years.
Staff also need to beware that the policy some councils adopt is of making no provision for pay protection at all if the drop is more than two grades, though such a drop is most unlikely to be regarded as suitable alternative employment.
Either way, a significant drop in salary will inevitably impact on pensions.
Some employers declare every member of the team potentially redundant, deleting all their posts and declaring all posts in the new structure as significantly different and asking everyone to apply for the new posts, be shortlisted and interviewed. Not only is this a very stressful and time-consuming process, but it can be very unfair.
If the new structure has jobs that are almost identical to those some staff currently do, then there should be two options. If there is only one person who does such a job, then the process of assimilation should apply. If there are a number of people who work in posts with very similar or identical responsibilities, but there are more people than posts, then a 'pool' should be created from which those staff (and only those staff) are selected.
Assimilating and matching skills and job roles is normal practice during service restructuring. Details of the person specification and relevant council policy on this matter are essential information. Redeployment policies may also be helpful at this stage. Where there is a 60–70 per cent overlap between posts in the old structure and in the new, then assimilation should take place where possible. In some councils, the percentage similarities are required to be higher for this process to apply.
A process of declaring all posts deleted is particularly time-consuming for the senior managers who have to make the appointments. This practice should be avoided if at all possible. If it cannot be avoided, detailed consultation and fair criteria are essential. Redeployment can be offered withing a school if you are in Scotland.
The process should be to:
- Identify in the new structure which posts are broadly similar to those which already exist
- Determine the pay scales based on responsibilities
- Where there is only one eligible person for such a post that person should be slotted into it and a skills audit to help validate this process should be completed at an early stage
- Where there is more than one candidate, the employer should request volunteers for transfer to any other available posts for which there is no competition and for which the candidates of the 'oversubscribed' post are eligible
- Then there should be a request for volunteers for severance on given terms
- Only if there is no voluntary solution, should there be interviews for the post.
Where the number of people in the 'old' structure with comparable job descriptions who meet the person specification for the new posts, exceeds the number of posts available, then the posts should be ring-fenced to that group of people. Posts should be ring-fenced, initially to individuals on the same level or above (if already displaced) employed within the organisation.
If posts on a particular level remain unfilled and there is a possibility of displacement at lower levels, they should be open to competition from within the organisation and ring-fenced to current employees. It may well be helpful to consult over job advertisements to avoid false or misleading information. Short listing and interviewing should follow agreed criteria and observe policies local councils have on equal opportunities.
No. There is no such right in law. However, there are two important arguments for encouraging volunteers if other staff face compulsory redundancy. The first is that the employer faces losing staff who want to stay and contribute to the work of the organisation. The second is that it is not in the employer's interest to keep staff who want to leave when they could leave.
Employers may point out they have no statutory duty to allow volunteers, and that they risk losing key skills, and that volunteers are sometimes staff with long service whose redundancy might cost more than those facing compulsory redundancy. However, unless employers can demonstrate that only those seeking voluntary redundancy can perform a particular job, we should press hard to let volunteers go, so that others who want and need work can stay. The mere fact that an employee volunteers does not, however, mean that the redundancy will be granted. If volunteers are accepted, the employment will be lawfully terminated by reason of redundancy.
The normal process here will be to invite "expressions of interest". Just because someone has expressed an interest does not mean they have to go. On the contrary, it simply means they want to be considered, but subject to finding out what the financial benefits and costs are, and those who do so can change their mind. A member of staff is only finally committed to taking voluntary redundancy when they have signed an agreement to do so.
Selection for redundancy
Where there is any question of redundancy, the unions have a right to discuss the selection criteria. The criteria must be clear, objective and precisely defined and must not discriminate against employees on a protected ground, e.g. disability or pregnancy, and must be applied in a reasonable, fair and unbiased way.
Early retirement on suitable terms may be a way of avoiding compulsory redundancy. It is often only made available after the matching and selection process is completed. Voluntary early retirement on the grounds of redundancy or the "efficiency of the service" is usually, however, at the discretion of the employer and the pension benefits should always be carefully checked (see 'pension rights' below).
Employment law encourages employers who are considering dismissing someone by reason of redundancy to look for alternative employment for that person. In law, a failure to take reasonable steps to find alternatives to redundancy can make a redundancy dismissal unfair.
However, that does not necessarily mean that all offers of work from an employer are "suitable alternative employment". In general terms, it has to be work that the employee can reasonably be expected to undertake, bearing in mind their skills and seniority, and it has to be offered on terms and conditions that are not substantially less favourable to the employee concerned.
In some situations staff facing redundancy find alternative work before notice of dismissal is issued. In other cases, it is only while the employee is working during the notice period that a possible alternative role is identified. In making a decision whether to accept an alternative position on offer, staff will have to take into account a range of circumstances which include the degree of salary protection offered, as well as the nature of the role itself, responsibilities, career prospects and personal circumstances.
Travelling distance and time may also be a factor. If the employee accepts an alternative role, any notice of dismissal can be withdrawn by agreement, and no dismissal or redundancy then takes place. The employee would continue in continuous employment in the new position.
It depends on whether the work on offer is really suitable. In broad terms, the right to a redundancy payment will be lost where an employee has unreasonably rejected an offer of suitable alternative employment. In order to lawfully avoid having to pay a redundancy payment in this situation, the employer must establish that the following elements are present:
- the offer of the new role must be made before the old contract has ended.
- the new role must begin before or within 4 weeks of the date on which the existing contract ends.
- the new role must be a suitable alternative
- the rejection of it must be unreasonable
Whether a post being offered is a suitable alternative requires an objective assessment of whether the new job offered is suitable in terms of
- the status, role and responsibilities of the position,
- the financial package, including the grade and protection arrangements,
- the place of work, especially if that has substantially changed
- the hours, holidays and other terms and conditions.
No one single factor is decisive in legal terms and the job has to be considered as a package. The fact that a job may require some retraining does not necessarily make it unsuitable. A lower status job for the same pay can be unsuitable. A similar status job with a reduction in pay may be suitable though that will depend on the scale of the pay reduction. If there is salary protection for a year or more, the fact that the post requires salary protection, on its own, may not make the job unsuitable, particularly if there is opportunity for further advancement before the salary protection period ends, though again the degree of salary difference will be a factor. The question of whether the post is permanent or temporary is also relevant and a fixed-term or temporary post is likely to not be a suitable alternative to what had been permanent employment.
An offer of school-based work to a member of staff currently centrally employed in a local authority education support service is not a decision for a local authority alone to make. Schools tend to have delegated management powers today and their agreement would therefore be required to offer such a role. Indeed, for certain more autonomous, schools, the local authority is no longer the relevant employer, in the eyes of the law. In summary, the employer cannot expect the employee to accept any job that is offered; nor can an employee automatically reject any job that is offered without risking loss of redundancy entitlements. It all depends on the particular circumstances.
Whether rejection of an offer is an unreasonable rejection will affect entitlement to redundancy payments. If the job offered is not suitable, then the redundancy payment is not placed in jeopardy if the offer is refused. If, however, the job is suitable, then our member may lose the right to the redundancy payment in rejecting that job.
In considering reasonableness, an employment tribunal could also take account of personal circumstances which are unrelated to the job. These can include family situations, personal views (e.g. conflict in the past with those who will now manage the employee), or the fact that the employee has had insufficient time to consider the offer properly.
If an offer of alternative employment is to be rejected, the reasons for rejecting it should be set out clearly in correspondence at the time. If the employer subsequently withholds the redundancy payment, then an employment tribunal claim may be necessary and advice should be sought through the Aspect regional official. Prior to that being the case, Aspect would want to discuss with the member and the employer whether the employer's actions are reasonable in the circumstances. Reasonable in this context means "in law" and is not a moral judgement.
Yes. The law allows a trial period of up to four weeks (or longer if retraining is required) for the employee to try the role before making a final decision. Members must insist on this when considering any such offer and should get it in writing.
Staff working under fixed-term contracts must not be treated less favourably than other employees when an employer seeks to implement redundancies. This is laid down by the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002.
The same is true for part-time workers, under the Part Time Workers (Prevention of Less Favourable Treatment) Regulations 2000. The selection for redundancy of any such staff is viewed as an automatically unfair dismissal, in the eyes of the law, if the reason for that selection contradicts any of their rights awarded under these regulations. It is also unfair to make an employee redundant because he or she has requested flexible working.
The right to request flexible working arrangements became a statutory entitlement in 2003 for parents of children under age 6 or of disabled children. In 2007, this was extended to carers of vulnerable and disabled adults and, in 2009, to parents of children under age 17. Although employers may deploy lawful reasons for denying such individual requests in certain circumstances, many have been granted and it is unlawful to make such an employee redundant simply because they work flexibly in such situations.
Regulation 3 of the Regulations states:
3 — (1) A fixed-term employee has the right not to be treated by his employer less favourably than the employer treats a comparable permanent employee— (a) as regards the terms of his contract; or (b) by being subjected to any other detriment by any act, or deliberate failure to act, of his employer. The only circumstances where fixed term employees might not be in the "pools" from which staff are selected for posts in the new structures is where there is "objective justification" for doing so and it is difficult to imagine any where this is the case in the restructures affecting Aspect Group members.
Raising this issue at the time of the consultation also allows any later redundancy termination to be ran as automatically unfair dismissal under Regulation 6 of the same Regulations and the Employment Rights Act 1996 section 105 (7F).
This could be regarded as treating part time staff less favourably if the only posts available in the next structure are for full time staff when there are currently part time staff employed who could do those jobs. In such circumstances, the minimum that employers are required to do is to make it clear to part-time staff that they should apply and then the employer can see if the work can be done between two part timers (possibly as a job share) or shared out in other ways
Plenty of staff in local government work 9 day fortnights where the job allows them to, in school improvement for example. Staff who are in that situation, usually because of carer responsibilities, should make clear that whilst they wish to apply for full time jobs in the new structure, they wish to work a 9 day fortnight. It may be necessary, if the post is significantly different, to make a renewed application for flexible working as employers may try to argue that the business case is now different. In fact it is most unlikely to be different.
Pregnant employees and staff who are absent from work on maternity or adoption leave should be included in redundancy consultation and selection processes in the same way as other affected employees, although it may be necessary to change how they are consulted if they are absent from work.
Employers must ensure that the redundancy selection criteria are objective and non-discriminatory to avoid claims of sex discrimination and unfair dismissal, and ensure that the criteria are applied fairly. For example, if absence from work is one of the selection criteria used, then any absences directly related to the pregnancy or to time off for dependents should not be included to avoid potential sex discrimination.
However, employers must prioritise employees on maternity or adoption leave who are under notice of redundancy for offers of suitable alternative employment where these exist. Under regulation 10 of the Maternity and Parental Leave Regulations 1999, these employees must be treated more favourably during their redundancy notice period than any other redundant employees, even those who are better qualified. A failure to meet this obligation could result in the dismissal being automatically unfair and also potentially in direct sex discrimination. However, if there are no suitable alternative vacancies, an employee may be made redundant during or after maternity leave.
Some employers have a formal appeals process. If they do not then staff would need to consider lodging a grievance if informal discussions cannot resolve concerns. Details are likely to be in your local "managing change" policy.
This is a real and very important problem. Employers have a duty of care to staff and staff have a duty of care to those with whom they work. If you believe the workloads in new posts are too high and unsafe for yourselves or for safe practice, it is essential that you find ways of placing those concerns on record. Staff may well not want to cause ripples at a time of redundancy but failure to place concerns on the record, in writing albeit in a low key way, is a serious mistake. Even if nothing is done about those concerns the letter or email or minuted discussion is evidence that you raised concerns which you can return to at a later stage.
Aspect Group social workers have produced a number of pro forma letters one of which is about workloads and which you may wish to adapt.(LINK)
When a redundancy is being implemented, there is a statutory entitlement to a minimum level of redundancy pay for staff with at least two year's service. This statutory redundancy pay is calculated as follows:
- half a week's pay for each complete year of service below the age of 22
- one week's pay for each complete year of service between the ages of 22 and 40
- one and a half week's pay for each complete year of service after reaching 41
The maximum total length of service which can be taken into account, for this purpose, is 20 years and the total amount of a "week's pay" is also capped, and is currently defined as £380.
However, many local authorities, and other major employers, have traditionally paid higher amounts than these statutory entitlements, known as "enhanced" redundancy pay, although some have reduced the financial value of their enhanced payments, over recent times. Such enhanced payments are often modelled on the basic statutory scheme i.e. they are based on age and service (which is specifically permitted, under the government's Age Regulations), but use a multiplier to increase their value, and may also be based on the employee's actual weekly pay as opposed to the statutory scheme's capped figure.
Redundancy pay is awarded tax-free up to a level of £30,000. Employers may, however, offer different levels of redundancy pay in the event of compulsory, as opposed to voluntary, redundancies. SPA points and service increments should be included in the redundancy pay calculation.
If you are a member of the Local Government Pension Scheme (LGPS), and you are made redundant, you will also need to consider your pension rights. If you are aged 55 or above in such circumstances, your pension benefits are payable immediately, without any reduction despite the fact that you are retiring early. Indeed, at the employer's discretion, you may have your benefits enhanced through an award of up to 10 extra years of service or extra annual pension.
However, this approach is increasingly rare, given the current financial pressures on local authorities, and many are instead trying to change to lower-cost, and entirely discretionary, compensation payments to be added to statutory minimum redundancy payments. This type of local policy therefore leaves you with an unreduced, but not enhanced, pension available if you are redundant at 55 or above.
You can calculate your LGPS benefit entitlements as follows: For each year of pensionable service before April 2008, you receive an annual pension based on 1/80th of your final pensionable salary. You also receive a tax-free one-off lump sum of three times the total value of your annual pension For each year of pensionable service after April 2008, you receive an annual pension based on 1/60th of your final salary. However, you can only receive a tax-free lump sum if you give up part of your annual pension.
Prior to 1 April 2008, any LGPS member could access their pension prior to normal retirement age, without reduction, if their age and total pensionable service added together came to 85 years. The "85 year rule" has now been abolished, but there are still protections for staff who were in membership of the LGPS as at 30 September 2006. These are:
- If you will be 60 or over by 31 March 2016 and wish to retire before age 65, provided you satisfy the 85 year rule when you start to draw your pension, the benefits you build up to 31 March 2016 will not be reduced.
- If you will be under 60 by 31 March 2016 and wish to retire before age 65, provided you satisfy the 85 year rule when you start to draw your pension, the benefits you've built up to 31 March 2008 will not be reduced.
- If you will be 60 between 1 April 2016 and 31 March 2020 and meet the 85 year rule by 31 March 2020, some or all of the benefits you build up between 1 April 2008 and 31 March 2020 will not suffer a full reduction.
As you can see from the above, your pension benefits are calculated with reference to your "pensionable salary" and "pensionable service". If you are working part time, your pension will be based on the equivalent full time salary level but service will be credited on a pro-rata basis for those periods when working part time. If you are employed on a term-time only contract, your full-time equivalent (FTE) will be based on a 44-week year.
"Final salary" is usually your pay in your last year of scheme membership, or one of the previous two years if this is higher. It is calculated to include maternity, paternity, and adoption pay, but does not include travelling or subsistence allowances. As a result of pensions legislation, all LGPS pension benefits must be put into payment prior to you reaching age 75.
The Employment Rights Act 1996 states that an employee must have two years' continuous service at the effective date of redundancy, with the same employer, in order to qualify for a redundancy payment. To claim unfair dismissal rights, one year's service is needed at the date of dismissal).
In calculating your entitlement to redundancy payment, local authorities must count all continuous local government service and other relevant service
To qualify for a statutory redundancy payment, employees need to have the required continuous local government service. Under the Modification Order 1999 employers are required to count as "continuous service", service in any part of local government (and with other specified bodies) in calculating redundancy payments up to a maximum of 20 years.
If your employer is a local authority and gives you notice of redundancy and before the dismissal takes effect you receive and accept an offer of employment from another body covered by the Modification Order 1999, you will lose entitlement to a redundancy payment.
This only applies where the relevant body makes the offer of a new job before the end of the old contract and the employment starts within the four weeks after the date of redundancy.
These restrictions do not apply if you find work with an employer outside local government or as an independent consultant
If the payment is:
- Statutory redundancy pay and pay in lieu of notice (but only where the letter represents damages to the employee for the inability of the employer to give the required notice and the employment ends immediately) are tax free for the first £30,000 taken together.
- Where the employer does not require the employee to work during some or all of the notice period, this is regarded as a form of 'garden leave', and tax and national insurance is deductible on the pay received by the employee.
- Termination payments may be regarded by HMRC as a deferred reward for services rather than compensation for loss of office and may be taxable, except for genuine discretionary compensation payments, which are written into the contract.
- Lump sum pension benefits are not taxable but annual pensions are taxable. Those who receive a return of contributions will have 20% deducted for tax.
The Aspect Group strongly advises member to take professional advice on all pensions and tax issues. The Aspect Group works with F and W, who are independent financial advisers (LINK) who can provide such advice. We also run seminars with F and W on these issues.
Such a transfer is covered by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). Where an organisation engages a contractor to carry out work on its behalf or where it reassigns such a contract no dismissals automatically occur in law.
However, although there is some legal protection, there are concerns. namely:
- the new employer has to take over the contracts of employment of the employees on existing terms and conditions and employees have continuity of employment for all rights
- pension rights do not transfer – a major problem
- anything done by the old employer prior to the transfer is deemed to have been done by the new employer; collective agreements with recognised trade unions, including an agreed redundancy policy, are transferred to the new employer; unless the employees are actually dismissed, no redundancy payments will be payable. any dismissal connected with the transfer is automatically unfair, unless the employer can show an economic, technical or organisational reason
- ('ETO') entailing changes in the workforce employers must consult trade unions or, if not recognised, elected employee representatives on the transfer.