Several firms have recently announced they are going into administration or are starting redundancy consultations. How should professional services firms handle these events and what does it mean for those involved?
It’s hard being a lawyer these days. Once upon a time redundancy was a rarity; now it seems commonplace. It is extremely stressful for the individuals involved and can be highly divisive as lawyers seek to justify their existence.
A redundancy is a dismissal and like any other dismissal it can be fair or unfair. For a redundancy dismissal to be fair there has to be a genuine redundancy situation and a fair procedure has to be followed. A genuine redundancy will occur when the job an individual was recruited to do no longer exists, or an employer intends to cease work in a particular location or a particular practice area, or where there is a need to reduce the headcount.
If faced with potential redundancy, consider the following:
You are entitled to reasonable paid time off work to look for alternative employment if you are placed at risk of redundancy.
If you are keen to stay put, consider making a proposal to your firm either on your own or collectively with others; consider offering to reduce your hours, or to take a pay cut or a sabbatical.
What does your contract say and what is your entitlement to notice pay?
Is this a genuine redundancy? Have they identified the right pool of individuals? What are the selection criteria: are they objective and being applied fairly? It is relatively easy to manipulate selection criteria to achieve a particular outcome. Employers sometimes reverse-engineer the process so that a particular outcome is achieved, so be alert to this.
There is an obligation to collectively consult with employee representatives where 20 or more redundancies are proposed within a 90 day period at one establishment. Consultation must begin in good time and not less than 30 days before the first dismissal takes place where the numbers of redundancies are between 20-99, and 45 days where 100 or more are affected. Failure to collectively consult entitles each affected employee to an award of up to 90 days’ gross pay.
You will only be entitled to a redundancy payment if you have more than two years’ continuous service. It is possible that your firm may offer more generous terms but in doing so they may require you to sign a settlement agreement, waiving any claims that you may have.
Depending on the circumstances, the scope for negotiation may not be very great but do try if at all possible to agree matters like a reference, whether you might be permitted to keep any useful precedents etc.
If at all possible try and stay on good terms with your old firm and colleagues. The legal profession is a small world and you never know when you may work with them again, or need to call in a favour.
Think about your practising certificate: it will come up for renewal in October. You will need to decide whether to renew it or to let it lapse and whether to keep your name on the roll.
Redundancy is an unfortunate fact of life: try not to take it personally. A genuine redundancy is not a reflection of your abilities as a lawyer.
Sarah Rushton, employment partner, Moon Beever
