Article written by Michael Pope, Consultant Solicitor, Employment department
Network Rail are reportedly planning to reduce their 42,000-strong workforce by approximately one third, with 7,000-9,000 jobs at risk. This is part of a wider restructuring project across the rail network that could see more than 10,000 job cuts.
According to reports, transport unions are unhappy with the rail companies for going directly to staff with a voluntary leavers scheme as they look to adapt to changing consumer travel habits. Claiming to have been “left out of the negotiations”, transport unions are warning of potential strike action.
The major rail companies have stressed their desire to protect jobs and offer security to their employees by striving to avoid compulsory redundancies. However, unions have claimed that senior management are ‘sounding out managers individually’ rather than launching formal consultations. The rail unions believe older workers are more likely to be made redundant in favour of younger managers and engineers on less favourable terms and conditions in their employment contracts.
Employers should consider asking for volunteers for redundancy before they commence a formal consultation process. Whilst there is no obligation on the employer to consider offering voluntary redundancies, it is sensible to do so to minimise the effect on morale of compulsory redundancies. Employers may wish to reserve the right not to accept all applications for voluntary redundancy, particularly if there are more applications than the proposed number of redundancies and employers wish to retain key members of staff.
The impact of the COVID-19 pandemic has significantly hampered the rail industry on the whole and the huge decrease in passenger numbers, particularly at the height of the pandemic, has forced Transport Secretary, Greg Shapps, to cut £2 billion of costs. This is an interesting development and one we will keep an eye on over the coming months.
The Grant Saw Employment department are hosting a webinar on restructuring and redundancy on Thursday 16 September 2021 at 12pm. This is the first of a two-part series on redundancy and will cover the different consultation procedures and when these should be used, how to conduct a consultation exercise, what to do if an agreement is not reached and how to implement changes to employment terms. You can sign up for this webinar here.
To discuss the contents of this article or for specific advice on an employment law matter, please email me or contact the Employment department on 020 8858 6971.