Many of London’s lawyers and financiers are now working under the threat of redundancy. Josh Spero looks at the rights and questions high-earners have to consider when faced with being made redundant
Many of London’s lawyers and financiers are now working under the threat of redundancy. Josh Spero looks at the rights and questions high-earners have to consider when faced being made redundant
There is little point in pretending that none of the readers of Spear’s will ever have need of redundancy advice: even the highest earners at the oldest, largest firms cannot be certain that their positions are entirely safe at the moment.
The spectrum of wealth management firms have been looking at redundancies, so when banks become bankrupt and law firms look to layoffs, every employee should be aware of their rights.
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If redundancy is looming, you can try to guarantee fair treatment by ensuring your firm follows these principles, set down by law and taken from the TUC’s Facing Redundancy guide. Your employers:
> Must follow a redundancy dismissal procedure which includes telling you about the reasons for the redundancy and exploring any alternative job opportunities.
> Have to give notice of redundancies and consult formally with the workforce where they are considering making more than 20 employees redundant over a period of 90 days.
> Will have to pay redundancy pay to most staff who have worked for more than two years.
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> Must not choose who gets made redundant on the basis of their sex, race, disability, age unless objectively justified, sexual orientation, transgender status, religion or belief, pregnancy or trade union membership.
Breaching these conditions can invalidate the redundancy or be a cause for compensation.
Laura Livingstone, an employment partner at Davenport Lyons, says that as a high-earner you need to be aware of some other aspects to get a fair deal: ‘Standard redundancy if you are a high earner is a drop in the ocean so you need to be clear what you are entitled to.
‘This is particularly important if a significant proportion of your income is made up through bonuses. Will these still be paid even if you are under notice of redundancy regardless of whether you have met your targets?
‘Companies may also offer an enhanced package over and above the statutory minimum if you sign a compromise agreement. In these cases, you are normally required by the company to seek legal advice and in some cases this is paid for up to a maximum amount.
‘At this stage it may be beneficial to you to pay the extra to see what else you could get if you feel the package isn’t what you think you deserve. Now is the time to raise it before you sign any agreement.
‘For example:
> If you are being offered a cash sum over the £30,000 tax free limit can the remainder be put into a pension? Additionally make sure your P45 is issued before the payment is made to take advantage of the basic rate of tax.
> What are your future plans? You could ask for outplacement fees to be paid up to an agreed maximum.
> If you have stock options, agree earlier vesting dates or ensure that trustees get the best possible deal for you.
> What about your existing benefits? Could you get your medical insurance paid for a certain time period past your redundancy date?
> Ensure that an agreed reference and announcement is received.
> If the company requires a non-disclosure or non-disparagement agreement ensure that you are happy with the terms as well.’
Redundancy, while deeply unpleasant and even traumatising (especially for those who define themselves by their jobs), is not necessarily entirely negative: for some people, it is just the push they need to step into the next stage of their career.
Laura Livingstone is an Employment Partner at Davenport Lyons and can be contacted by email at llivingstone@davenportlyons.com, or by telephone on 020 7468 2600 regarding bonus issues or any other aspect of employment law.
The TUC’s Know Your Rights line: 0870 600 4 882
