Severance Policy | Falkirk Council

We are committed to maintaining, as far as possible, the security of employment for its employees and the avoidance of compulsory redundancies. The Council however recognises that from time to time, a number of internal and external factors impact on how Services are delivered which in turn impacts on the number of employees required. It also accepts that there may be situations where employees may express an interest in severance.

The Severance Policy aims to ensure that all employees will be treated fairly and the process applied is transparent and objective. The principles of the policy will be applied to severance and both voluntary and compulsory redundancy situations. The policy will be implemented in consultation with all recognised Trade Unions.

The Severance Policy covers all employees of the Council who cease employment where:

on the grounds of business efficiency, it is in the interest of the Council that an employee should leave the Council's employment; or
an employee is dismissed by reason of redundancy.

The purpose of the policy is to set out the framework within which employees will be compensated in the above circumstances, for loss of future employment. The policy outlines the benefits that may be payable in an efficiency (severance) or redundancy situation. For the purposes of this policy, the definitions are as follows:

Severance – where an employee leaves the Council's service on a voluntary basis, through business efficiency and is awarded compensation for loss of future employment. Any termination is by agreement and may be in response to a corporate exercise or to an individual expression of interest.
Voluntary redundancy – voluntary redundancy can be requested and considered where a pool has been identified as part of a compulsory redundancy process. Where a compulsory redundancy exercise occurs, voluntary redundancy will, where appropriate, be requested and considered in the first instance from within the identified pool.
Compulsory redundancy – The Employment Rights Act 1996 defines a redundancy situation (see definition of redundancy below). This will arise where the employee is dismissed on the grounds of compulsory redundancy in accordance with the agreed criteria noted within the policy.

This information constitutes the statement of published policy required by Regulation 51A of the Local Government (Discretionary Payments and Injury Benefits)(Scotland) Regulations 1998.

Table of contents

Scope

This policy covers all employees of the Council.

Where an employee wishes to access their pension scheme benefits and continue working a flexible retirement request should be submitted.

General principles and considerations

Nothing in the policy can take precedence over the statutory provisions that authorise the Council to pay pension scheme benefits, statutory redundancy benefits or compensatory benefits. The final decision regarding any discretionary payment lies with Falkirk Council.

Where an employee has received a benefit under Falkirk Council or Falkirk Community Trust's Severance Policy, they cannot be re-employed by Falkirk Council, including as a casual worker or on a consultancy basis for Falkirk Council. In specific circumstances and to meet service requirements, Service Directors in consultation with the Head of Human Resources and Business Transformation may authorise a short term arrangement, however this must be time limited, normally for a maximum of 3 months and only with permission from the Chief Executive can this be extended. This may not be repeated in the same calendar year and in general Service Directors should not re-engage the same ex employee regularly. Service Directors should consider the tax implications referred to at tax and deductions in determining whether re-employment is appropriate.

If an employee holds a casual post at the time of accepting severance they must resign from this post.

If an employee has a second post with the Council that they are not taking severance from, they may remain in this post but they cannot, from the date of severance, accept an increase in hours in their current post, an offer of employment for any additional post or accept any casual work in any capacity.

Where appropriate, benefits in respect of part time employees will be proportionately reduced relative to the actual hours worked.

With the exception of compulsory redundancy situations, the compensatory lump sum may be offered on the basis of a signed settlement agreement between the employer and the employee. Where appropriate, this will be discussed with the employee at the time the formal offer is made to them.

Severance

Severance includes cessations and retirements on the grounds of the Council's business efficiency.

From time to time, the Council may seek expressions of interest in severance. Alternatively, employees may request consideration of severance at any time in their employment. In these situations the termination date will be by mutual agreement. As the reason for the termination itself is by mutual agreement, no notice period nor notice pay need be given as the termination date itself will be agreed by both parties. Severance requests should be submitted using the Voluntary severance application form:

Downloads: Voluntary severance application form
DOCX file, 39.5 KB

Severance should not be used to encourage poor performers to leave the employment of the Council. Such cases should be dealt with by using the appropriate training and development techniques to improve the employee's performance, or ultimately, by using the Council's Capability Policy & Procedure or Disciplinary Policy. Similarly employees with ill health should be managed in accordance with the Managing Sickness Absence Policy and where appropriate the Rehabilitation & Redeployment Policy & Procedure/Capability Policy & Procedure.

Voluntary requests will normally only be approved and agreed where efficiency savings are achieved (see assessing applications for severance for further information on assessment). There is no guarantee that any request will be approved or agreed.

In order to compensate for the future loss of employment and to encourage employees to voluntarily offer to terminate their employment with Falkirk Council a compensatory lump sum will be payable and where appropriate pension benefits may be released. The compensatory lump sum is an immediate one off payment, paid by the employing service. Services are also responsible for the payment of strain costs, where these are incurred.

A compensatory lump sum cannot be awarded if the employee is being awarded compensatory added years pension for the same employment. In a compulsory redundancy situation, Falkirk Council will ensure that all statutory entitlements are received.

See the compensatory payments section for levels of compensatory lump sum payments that can be awarded.

Assessing applications for severance

When considering an application for severance under the scheme, the Service Manager or Head of Service must, using the HR Forms Online System:

Prepare a comprehensive assessment of service delivery implications, including the replacement strategy and financial implications of any offer being considered
Consult with the Service Accountancy Manager, Head of Service and Service Director on the proposal and proposed service delivery
Consult with the Head of Human Resources and Business Transformation and the Chief Finance Officer regarding the workforce and financial implications of the severance package

Replacement strategy/financial implications

Severances can only be approved where the Service can clearly identify efficiency savings and/or operational improvements that will be implemented. Generally any proposal will be expected to include the deletion or redesign of the employee's or a related post. This could include techniques such as job re-design and/or alternative service delivery methods. The list below is not exhaustive but provides an indication of the type of situations that could be considered to achieve the necessary savings:

The employee will not be replaced and the post will be deleted
The employee will not immediately be replaced, thus leaving the post vacant, using vacancy management to support savings required
The employee will be replaced, but an alternative vacant post in the structure will be deleted
The vacant post will be re-designed on a lower grade
The vacant post will be filled on a part time basis
A budget will be deleted either on a one off or rolling basis.

The employing service has to meet any associated cost of granting a severance application, including any payment to the Pension Fund (a "strain payment") to offset the liability arising from the early payment of an employee's pension scheme benefits and any other payments arising from the severance package. The strain payment/cost can be paid in instalments over a 5 year period or as a lump sum. The repayment period is at the discretion of the employing Service. Taking this into account, a severance proposal can only be approved, by the Director, where financial savings of at least 100% of the annual salary inclusive of the cost of the severance can be recovered over a period of up to 5 years.

In each case, the service will require to show how the existing workload will be delivered in the future on the basis of the proposal. The information will be shared with the Trade Unions and provided in writing. The Service Manager or Head of Service should discuss their proposals with Trade Union local stewards. A printout from HR Forms Online may aid/support discussions but will not be shared in full as this involves confidential financial information.

Approval process

The employing Service Director (or Chief Executive in relation to Chief Officer requests) in conjunction with the Head of Human Resources and Business Transformation and the Chief Finance Officer will consider all relevant factors, including the costs, workforce implications and savings to the Council and the impact on the existing team.

Whilst decisions on severance should be based on financial benefit, consideration must also be given to operational improvements and on-going service delivery.

Only where it can be demonstrated that financial savings of at least 100% of the annual salary inclusive of the cost of the severance will be recovered over a period of no more than 5 years and that the proposal is in the interests of the Council will an offer be approved.

Where the proposal does not achieve the required level of savings, the proposal can be referred to Elected Members for approval. This may include situations involving conservation or protection arrangements, which will in the longer term achieve a saving. The Service Director should consult with the Head of Human Resources and Business Transformation and the Chief Finance Officer prior to referral to Elected Members.

Where severance is proposed for a Chief Officer, the Chief Executive or relevant Director will advise the relevant Portfolio Holder prior to any offer being made.

If an application is to be granted, the relevant Service Manager or Chief Officer, with support from Human Resources, must consult with the appropriate Trade Union(s) regarding the future performance of the employee's work. This may include the re-organising or restructuring of the Service or a redesign of the job.

Services have the ability to "pool" applications where savings for individuals are less than the required percentage but combined with offers being made to other individuals achieve over the required percentage savings.

Where a severance request is approved on the basis of the post being deleted or amended, Finance and Human Resources will ensure the necessary changes are made to the Service's budget and establishment.

There is no general right of appeal against any refusal to grant a severance request. Where however an employee considers that their request has not been dealt with in accordance with the policy or has been dealt with unfairly, the matter will be dealt with as part of the normal grievance process.

Where a severance request is refused, the Service and employee may consider alternative approaches such as Flexible Retirement or flexible working.

All documentation relating to severance applications (whether granted or not) will be retained by the Head of Human Resources and Business Transformation for future audit purposes. Electronic records will be held on HR Forms Online.

Redundancy

Definition of Redundancy

The Employment Rights Act 1996 outlines that a redundancy situation arises where a dismissal is wholly or mainly because the Council:

has ceased, or intends to cease, to carry on a particular function or role of its business for the purposes of which the employee was so employed or
has ceased, or intends to cease, to carry on a particular function or role of its business in the place where the employee was so employed or
requirements for employees to carry out work of a particular kind has ceased or diminished or are expected to cease or diminish or
requirements for the employees to carry out work of a particular kind, in the place where they were so employed, has ceased or diminished or are expected to cease or diminish

Employees who have less than 2 years' service and are on a temporary contract will be managed in accordance with the temporary employment policy.

Where a redundancy situation arises as a consequence of a Service restructure, the Service Director will consult with the relevant Portfolio Holder. Corporate redundancy exercises will be approved by Elected Members.

Consultation

The Trade Union & Labour Relations (Consolidation) Act 1992 (TULR(C)A & (Amendment Order 2013) requires the Council to formally consult 'in good time' with recognised Trade Unions where redundancies are contemplated. To do otherwise is in breach of this legislation and would bring with it potential liability. As such, collective consultation with recognised Trade Union representatives must take place prior to any decision being made that compels, contemplates or plans for redundancies.

The aim of collective consultation is to avoid the termination of employment contracts, minimise the number of workers affected and mitigate the consequences of any proposed redundancies. This consultation process will enable Trade Unions to formulate constructive proposals for consideration and work with the Council to achieve the above objectives. Collective consultation will be undertaken with a view to reaching agreement.

Although as much time as practical will be provided, the Council will abide by the statutory minimum timelines for consultation which are as follows:

Where it is proposed that 19 or fewer employees could potentially be made redundant from one establishment, no collective consultation is required, however in accordance with good practice, the Council will consult with relevant Trade Unions at least 30 days prior to notification of the first dismissal. The requirement for individual consultation with those affected will still apply. This will not include the end of a temporary project or individual contract which necessitates a redundancy payment, due to the length of the contract
Where it is proposed that between 20-99 employees could potentially be made redundant from one establishment within a 90 day period, collective consultation will commence at least 30 days before the date of implementing any dismissals
Where it is proposed that 100 or more employees could potentially be made redundant from one establishment within a 90 day period, collective consultation will commence at least 45 days before the date of implementing any dismissals

Whilst the above indicates the minimum collective consultation period, the Council will endeavour to provide earlier notice where practicable and possible. The collective consultation process may end before the expiry of these periods if that is the intention of, or inferred by, the relevant Trade Unions.

In accordance with legislation, the Council will initially provide the following information to main Trade Union contacts of the recognised Trade Unions:

The reason/s for potential redundancy
The numbers and descriptions of employees proposed for redundancy
The total number of employees of any such description employed at the establishment in question or where more appropriate, by Falkirk Council in general
The proposed method of selection for redundancy (see selection criteria below)
How the redundancy dismissals are to be carried out including the time period
The method of calculating the amount of redundancy payments to be made to those who are dismissed

Information will also be provided to relevant Trade Unions where there are implications for employees not directly affected by the redundancies, for example, those employees whose roles or working arrangements may differ as a result of the redundancies being made. Employees who are absent from the workplace during the consultation process such as on a career break, long term sick or maternity/adoption leave will be provided with the relevant notification and information.

The Council will also notify the Department for Business, Innovation and Skills (BIS) when there is a proposal to make 20 or more employees redundant at one establishment over a period of 90 days, as is the statutory requirement.

The Council recognises certain Trade Unions for collective bargaining purposes and will fully consult with these Trade Unions on potential redundancies, however information will be provided directly to affected employees where necessary and appropriate. Following the commencement of the formal consultation process with Trade Unions, information will be provided to affected employees as quickly as possible thereafter.

Women who are on maternity leave when there are redundancies that may affect them must be consulted. This will mean either inviting them to come in to discuss the situation or visiting them at home.

Alternative measure to redundancy

Where the need for redundancies has been identified, attempts in the first instance will be made to avoid compulsory redundancies by considering a number of options:

Restrictions on Recruitment/vacancy management – for instance, stop advertising vacancies in order to reduce numbers being appointed or recruit temporary employees to offer some level of short term flexibility if this would assist
Voluntarily reduced hours: this may be of interest to a number of employees which may reduce the need for compulsory redundancies or reduce the numbers affected
Reduction in overtime
Short time working: it may be that employees would consider reducing their hours of work on a temporary basis to reduce the need for compulsory redundancies
Redeployment, including retraining of employees – individuals identified as part of a pool could consider redeployment/training opportunities
Career breaks/sabbaticals
Discontinuing temporary employees
Flexible Retirement
Natural turnover
Voluntary Severance
Voluntary Redundancy (see voluntary redundancy below) and
Any other cost/saving initiative which may be available

This list is not exhaustive but an indication of options that may be considered. Services should carefully consider these options which may be used creatively to avoid compulsory redundancies, for instance, it may be appropriate to consider reducing hours from 37 to a lower number of hours for all employees for a short period. These options should be fully explored and consulted on as part of the process. These options may also be considered prior to any compulsory redundancies being proposed.

Identifying the pool

The Council will in the first instance determine the pool of employees from which the compulsory redundancies will be made. For consultation purposes, each site is usually a separate "establishment", however it may be more appropriate in some cases to identify an organised group of staff across different sites, eg SJC employees or a particular job title. The pool will be determined by the area or function reducing or ceasing, for example, a nursery closing would mean all employees within that particular location, or if it were chargehands and it was identified that there were surplus chargehands in general, the pool would be that particular job title. The selection pool will be discussed with Trade Unions and where possible agreed in line with legislative requirements. Employees across more than one location or Service can be classed as ‘one pool' for the purpose of calculating the minimum periods of collective consultation.

If a unique post is identified for redundancy affecting a single employee, depending on the tasks of the role there may not be a need to identify a pool.

Where necessary, support will be provided by Governance and Human Resources to identify the suitable pool of employees.

Once a pool of employees has been identified, no vacancy will be automatically advertised for recruitment. Where possible, each post will be considered for redeployment against the pool of employees, with the aim of reducing the numbers that may require be made redundant. This will be organised in line with the Rehabilitation and Redeployment Policy.

Voluntary redundancy

In the interests of the Council, before any compulsory redundancy exercise is progressed, a voluntary redundancy option will enable all employees, with over 2 years service, within the specific pool identified, to apply to be considered for voluntary redundancy.

There is no right to voluntary redundancy and the Council will make the final decision on which volunteers to accept, which will be based on the selection principles outlined below.

A full consultation process as outlined in the consultation section will be required for any voluntary redundancy exercise. In this situation, the Council will determine the termination date, although Service Directors will have discretion to consider alternatives where this offers increased efficiencies to the Council.

In order to compensate for the future loss of employment and to encourage employees to voluntarily offer to terminate their employment with Falkirk Council a compensatory lump sum will be payable. The compensatory lump sum is an immediate one off payment, paid for by the employing service. Services are also responsible for the payment of strain costs, where these are incurred.

Assessing applications for voluntary redundancy

When considering an application for voluntary redundancy, the relevant Service Manager/Head of Service must use the HR Forms Online System:

Prepare a comprehensive assessment of service delivery implications, including the operational and financial implications of any offer being considered
Consult with the Service Accountancy Manager, Head of Service and Service Director on the proposal and proposed service delivery
Consult with the Head of Human Resources and Business Transformation and the Chief Finance Officer regarding the workforce and financial implications of the severance package
Where more than one employee from the same pool/unit requests voluntary redundancy, and where necessary, the selection process outlined in selection criteria below will be used to determine the employees who may be further considered. Whilst this will provisionally determine the selection process, consideration must also be given to the financial cost of any offer(s) being assessed before any final determination is made

Replacement strategy/financial implications for voluntary redundancy

If an employee is to be granted voluntary redundancy, the Service Director must clearly identify efficiency savings and/or operational improvements that will be implemented. Generally any proposal will be expected to delete the employee's or a related post, however it is accepted that where more than one employee is involved, in some circumstances this may require the team to be redesigned or a restructure of a unit, resulting in the creation of a post at a lower level.

The employing service has to meet the cost of granting a voluntary redundancy application, including any payment to the Pension Fund (a "strain payment") to offset the liability arising from the early payment of the employee's pension scheme benefits.

Taking this into account, a voluntary redundancy proposal will only be approved, where financial savings of at least 100% of annual salary inclusive of the cost of the severance will be recovered over a period of no more than 5 years and it is in the interests of the Council.

In each case, Services will require to identify how the current workload will be managed. This means determining how the existing workload will be delivered in future on the basis of the proposal being made, and this will be provided to Trade Unions in writing. A print out from HR Forms online can be used to facilitate discussions.

Approval process for voluntary redundancy

The Chief Finance Officer in conjunction with the relevant Chief Officer or manager and the Head of Human Resources and Business Transformation will consider all relevant factors, including the cost and savings to the Council and the operational implications.

Whilst decisions on voluntary redundancy should be based on the financial benefit, consideration must also be given to on-going service delivery to ensure it is in the interests of the Council.

Where the proposal does not achieve the required level of savings, the proposal can be processed by the Service Director referring it to Elected Members for approval. This may include situations involving conservation or protection arrangements, which will in the longer term achieve a saving. The Service Director should consult with the Head of Human Resources and Business Transformation and the Chief Finance Officer prior to referral to Elected Members.

Where voluntary redundancy is proposed for a Chief Officer, the Chief Executive or relevant Director will advise the relevant Portfolio Holder prior to any offer being made.

If an application is to be granted, the Service Director, with support from Human Resources must consult with the appropriate Trade Union(s) regarding the future performance of the employee's work. This may include the re-organising or restructuring of the Service.

Where a corporate voluntary redundancy exercise is being conducted and to ensure consistent application of this policy, the proposals can be presented to Corporate Management Team for comment and scrutiny.

Once approved, Finance Services and Human Resources will ensure the necessary changes are made to the Service's budget and establishment.

There is no general right of appeal against any refusal to grant a voluntary redundancy request. Where however an employee considers that their request has not followed policy or has been dealt with unfairly, the matter will be dealt with as part of the normal grievance process.

All documentation relating to voluntary redundancy applications (whether granted or not) will be retained by the Head of Human Resources and Business Transformation for future audit purposes. Electronic records will be held on HR Forms Online.

Selection criteria

Where there remains more employees than jobs in the identified pool, selection criteria will have to be applied in order to select the required number of employees for redundancy. Selection criteria should be as objective as possible, measurable and justifiable in order to ensure the fair and transparent selection of employees for redundancy.

There may be situations where selection criteria is not necessary, such as a service closure, and the pool will be all of those in the affected establishment.

The redundancy selection criteria should be objective wherever possible, precisely defined and capable of being applied in an independent and consistent manner to all employees. This is to ensure that the process is conducted fairly.

It should be noted that it would be difficult to carry out a meaningful selection process without some element of judgement, but any subjective information used should be balanced with objective information.

The criteria that will be used can include:

Qualifications. These must be the essential qualifications for the post and will be identified from the person specification and job description. In most circumstances, individuals will have the same level of qualification if this is required for the post. If this is the case, additional relevant qualifications can be considered for a higher score.
Skills and competencies to undertake the post. These need to be specific, measurable and linked to the post and will be identified from the person specification and job description. Information from 1-1s, supervision, APDS & TNAs should assist in this assessment.
Experience and knowledge required to undertake the post. These need to be specific, measurable and linked to the post and will be identified from the person specification and job description. Information from 1-1s, supervision, APDS & TNAs should assist in this assessment. Standards of work performance. Information from 1-1s, supervision, APDS & TNAs should assist in this assessment.
Disciplinary Record. Only current warnings can be used. Expired warnings should not be considered and therefore records must be checked and accurate.
Sickness & attendance. Records must be checked and accurate. Absences relating to carer's leave, maternity leave and pregnancy related absences should be discounted. The total of disability-related absences and any industrial injuries may need to be adjusted downwards to provide a fair comparison. See further guidance in the redundancy selection matrix.

The scoring for each criteria will be as per the redundancy selection matrix. Weighting may be applied to the criteria which will be developed at the time of each redundancy exercise to meet the needs of the Council at any given time. This information will not be available to managers making the assessments to ensure objectivity. Those employees with the lowest scores will be selected for redundancy.

Where a situation arises, where all other criteria measures have been exhausted and the employee scores are even, then length of service with Falkirk Council or its predecessor will be used, on a Last in First Out (LIFO) basis. If an individual has broken service, the periods of employment will be aggregated to allow a fair comparison to be made.

The blend or matrix of criteria used may differ between each selection exercise undertaken by the Council and will be discussed with Trade Unions as part of any consultation process.

Implementation process

Stage 1 – Information meeting

A brief meeting will be held with all affected employee/s and the relevant manager with a representative from Human Resources. The purpose of the meeting will be to advise the employee/s that they are at risk of redundancy. At this meeting the manager will provide brief reasons for the redundancy and the process to be followed along with timescales. This meeting should be a consultative meeting only and is an opportunity to provide information on the reasons and process to be used along with exploring options to reduce the need for redundancies. It should be made clear to the employees that no decision has been made at this stage as to whether they will be made redundant. Employees can be asked to consider their position with regards to suitable alternative employment at this stage.

The manager will also write to all employees within the pool to confirm that they are at risk of redundancy and outline the selection process and timescales to be applied.

Before Stage 2 the affected employees should have the opportunity to comment on the proposed selection criteria.

Stage 2 – Scoring

The employees contained in the established ‘pool' will be scored using the agreed criteria by the relevant manager. The manager may consult Human Resources for assistance in completing this. Once all scoring is completed the scoring sheet will be issued to the relevant employee for their consideration. No weighting will be applied at this stage.

Stage 3 – Individual meetings

A meeting will be arranged with each employee, providing at least 5 days notice, to discuss and assess the scoring. The employee should be made aware of how the score has been arrived at and this is an opportunity for employees to challenge the scoring, raise concerns or any specific matter that arises from their own assessment. The relevant manager and a representative from Human Resources will be present and each employee will have the right to representation of their choice at this meeting.

The employee must be given the opportunity make any comments which should be taken into account before a decision is taken.

Employees should be allowed enough time to reasonably consider their individual scoring and the redundancy proposal in general, for example alternative actions that could be considered to avoid the redundancy. Management should give consideration to any reasonable comments the employee makes.

Where an employee disagrees with the scoring, a panel, made up of 3 independent Managers from across the Council will assess written submissions from both management and the employee for final consideration of any disputed scoring. The panel will make the final decision.

Employees must not be given their colleagues' scores, only their own.

Stage 4 – Finalise scores

Following individual meetings with employees, the relevant manager will finalise all scores at which time the full list of scores will be discussed with Trade Unions. Trade Unions will have an opportunity to challenge the scoring applied, however the final decision will lie with the relevant manager. Those with the lowest scores will be highlighted at this stage as being at risk of redundancy.

Stage 5 – At Risk: Redeployment & re-training

Those at risk of redundancy will have an opportunity to meet with a representative(s) from Human Resources, or other advisers where appropriate. This will help facilitate the redeployment process and will also provide an opportunity to discuss and consider any possible re-training opportunities.

Stage 6 – Notice of redundancy

After consideration of any comments and where there is no alternative to redundancy, a meeting should be convened with each employee to advise them of the outcome of the scoring process. The relevant manager and a representative from Human Resources should be present to confirm the decision in relation to whether the employee has been selected for redundancy. The employee will have the right to representation at this meeting.

An employee who is selected for redundancy is entitled to notice. Where the employee has been selected, they will be issued with written notice of redundancy and will be placed on the redeployment list for the purposes of seeking suitable alternative employment. Employees who are given notice must be paid during the notice period even if they are unable to work eg through sickness. The minimum periods of notice employees are entitled to is based on their length of continuous service and will be as per the contract of employment.

Information will also be provided in relation to the proposed termination date and entitlement to payments including outstanding annual leave, all of which will be confirmed in writing. Generally, employees will be required to work their full notice period, however in specific circumstances, pay in lieu of notice may be more appropriate. During the notice period, employees are entitled to reasonable time off to assist in the search for other employment.

The employee will also be advised of the right for their case to be formally reviewed by a review panel. The Service Manager/Head of Service will write out within 5 working days confirming their decision and provide information on the review process.

Review Process

Any employee who has been selected for redundancy and who is dissatisfied with the way in which the Council has applied the redundancy selection criteria, or who believes that he/she has been unfairly disadvantaged by the selection criteria or not given a fair opportunity to put forward comments, can request a formal review of his/her selection for redundancy.

The review should be lodged within 5 working days of the formal notification of redundancy being given. The request for a review should be submitted to the Head of Human Resources and Business Transformation, who will arrange for a review hearing to be heard within 5 days of receipt of the request, or as soon as possible thereafter. The review hearing will be chaired by an independent Chief Officer. The same Chief Officer will consider all review cases received from the one pool, unless due to numbers or unforeseen circumstances this is impractical.

The outcome of the review process will be communicated to the employee in writing within 5 working days of the review hearing. The decision of the review hearing will be final. The process to be adopted at the review hearing is outlined in the Review Process.

Alternative Employment

Employees within an identified pool will be asked whether they would be willing to consider suitable alternative employment should they be selected for redundancy. Employees will be automatically added to the redeployment list and considered for posts in accordance with the Rehabilitation & Redeployment Policy. Following confirmation of their selection for redundancy a redeployment search will automatically commence as per the Rehabilitation & Redeployment Policy.

Trial periods will be offered in accordance with the Rehabilitation & Redeployment Policy and may be extended by written agreement with the employee.

Employees should be made aware of the consequences of accepting or refusing an offer of suitable alternative employment, for example should the employee unreasonably refuse an offer of suitable alternative employment, the employee may lose the right to a redundancy payment.

"Suitable" employment is work which the employee could reasonably be expected to do (in light of their qualifications, skills and experience) and on terms and conditions not substantially less favourable. The best approach is to discuss all possibilities with the employee and not discount any possible jobs on the assumption the employee will not be interested.

Consideration should also be given to reasonable adjustments that can be made to posts in line with the Disability Provisions of the Equality Act 2010.

An employee who accepts an offer of suitable alternative employment will not be redundant and will therefore not be entitled to a redundancy payment.

Employees selected for redundancy should, in accordance with legal entitlements, also be afforded reasonable time off to look for work or to arrange training. The employee should submit their request in writing to their line manager, outlining the reason for the time they require, within a reasonable time frame for the manager to consider the request.

If an employee finds alternative employment external to the Council and wishes to leave before the end of their notice period they may lose the right to a redundancy payment and any outstanding period of notice. If the employee wishes to leave prior to their termination date they must submit their request in writing to their Head of Service and consideration will be given to this.

Outplacement Programme

The Council may offer, as appropriate, an outplacement programme which may cover the following and be provided either internally or externally or by a combination of both:

Uncertainty, stress, transition counselling
Financial/welfare benefits advice
Assessment centre to enhance employees' self-knowledge of their skills, abilities, interests, values, decision-making, personality and experience
Identify career opportunities and setting goals
Job search techniques – Self marketing skills, CV writing, networking skills & opportunities, interview skills & techniques
Computer and internet access skills
Careers advice

Compensatory payments

Where eligible and approved, the package may consist of a combination of components. Some elements are mandatory and some discretionary. Levels of compensation vary depending on whether the termination of employment is voluntary or the employee has been dismissed on grounds of redundancy.

In severance and redundancy situations a compensatory lump sum is payable. The compensatory lump sum payment made under these arrangements by the Council includes any entitlement to the statutory redundancy payment as per the Employment Rights Act 1996. An employee made redundant, with 2 or more years' continuous service is entitled to a redundancy payment. The Council operates the Statutory Redundancy Payment scheme which from 01 October 2009 is as follows:

0.5 week's pay for each full year worked when you're under 22
1 week's pay for each full year worked when you're between 22 and 41
1.5 week's pay for each full year worked when you're 41 or older

The statutory redundancy pay matrix provides an easy reference matrix to assist in calculating the above.

A week's pay is the amount an employee would normally receive under his/her contract on the date of the cessation. If a week's pay varies for any employee an average pay over the previous 12 weeks will be used (excluding non-contractual payments such as overtime).

For the purposes of this policy, continuous service is service with employers listed in The Redundancy Payments (Continuity of Employment in Local Government, etc (Modification) (Amendment) Order 2001, where there has been a break of 7 days or less between employments. Employees with less than 2 years continuous service are not eligible for a redundancy payment.

In voluntary situations, the compensatory lump sum payment will be calculated based on the SCP as at the application date. In compulsory redundancy situations, the compensatory lump sum must always meet the minimum statutory redundancy payment level based on the SCP at termination date or where appropriate, the date when the notice period has expired.

For the purposes of this policy where an employee's pay exceeds the maximum level specified in the Employment Rights Act 1996, the redundancy payment will be based on the employee's actual pay.

An employing Service can decide to pay a compensatory lump sum that is less than the maximum allowed, although any statutory redundancy entitlement would be the minimum payable in redundancy situations. There is no right to receive this payment for termination on grounds of efficiency.

This Policy does not apply to situations where a redundancy payment is paid as a consequence of the end of a temporary or fixed term contract. In this situation the standard statutory redundancy award with no multiplier will be paid.

Where the contract between the employee and Falkirk Council is terminated, Falkirk Council will make a deduction from the employee's salary in relation to any outstanding loan, monies due in relation to the Bike to Work Scheme or other salary sacrifice scheme, or any monies due in relation to Occupational Maternity Pay. If the final salary is insufficient to allow for the whole of any such deduction, the employee will be required to repay the outstanding amount due to Falkirk Council within one month of the termination date.

Compensatory payment on grounds of efficiency

Severance and voluntary redundancy

In order to compensate employees for the loss of future employment, in situations where the employee voluntarily requests severance or redundancy, a maximum payment of up to 45 weeks may be available.

The statutory redundancy pay matrix provides an easy reference matrix of the above calculation for all age and service ranges, which in the case of any severance or voluntary redundancy situation, will be multiplied by 1.5.

The Service may decide to, on the grounds of affordability, in voluntary severance cases reduce the compensatory lump sum awarded. This calculation will not take into account incremental progression or pay awards. The calculation will be done at the time of application and will not be reviewed.

Example severance/voluntary redundancy compensation payment:

A person with a salary of £200 per week, aged 22 with 4 years of service will be entitled to 2 weeks salary - a total redundancy of £400. Then multiply that sum by 1.5 to arrive at a payment of £600.

Compensatory payment on grounds of compulsory redundancy

In order to compensate employees for the loss of future employment in compulsory redundancy situations, a maximum payment of up to 36 weeks may be available. The statutory redundancy pay matrix provides an easy reference matrix of the above calculation for all age/service ranges, which in the case of any compulsory redundancy situation, will be multiplied by 1.2. The Service may decide to, on the grounds of affordability, reduce the compensatory lump sum used as long as this does not reduce below the level of statutory redundancy pay.

The compensatory lump sum must always meet the minimum statutory redundancy payment level based on the SCP at termination date.

Example compulsory redundancy compensation payment:

A person with a salary of £200 per week, aged 22 with 4 years of service will be entitled to 2 weeks salary - a total redundancy of £400. Then multiply that sum by 1.2 to arrive at a payment of £480.

Compensatory added years

Compensatory added years could be used as an alternative to a compensatory lump sum on the basis of financial/economic grounds as the cost of compensation can be spread over a longer period.

Compensatory added years can be awarded to those who are or could be members of the pension scheme provided they have completed at least 5 year's service and would qualify for immediate access to scheme benefits on redundancy or efficiency grounds. The benefits arising from compensatory added years are a lump sum and a pension based on the compensatory period awarded and the employee's final pensionable pay. Compensatory added years compensation is paid for the duration of the employees' lifetime, and/or where appropriate, payable to the spouse or civil partner, which means it is not uncommon for a compensatory added years payment to be paid for a significant period of time. The immediate and ongoing costs of awarded compensatory added years are met by the Service. Services should be aware that the pension from an award of added years increases annually in line with the Consumer Price Index.

Compensatory added years and compensatory lump sums are mutually exclusive. It is possible however to combine a statutory redundancy payment with an award of compensatory added years.

Compensatory added years will be awarded in exceptional cases only. Where appropriate, the relevant Chief Officer will determine the approach that will be taken on each occasion, whether to offer compensatory lump sum or whether compensatory added years is more appropriate. This will be agreed with the Head of Human Resources and Business Transformation and the Chief Finance Officer. Employees may request compensatory added years as an alternative to a compensatory lump sum. There is however no guarantee or right to be offered compensatory added years.

Should compensatory added years be considered appropriate and offered as part of the package to an employee as an alternative to a compensatory lump sum, the total value of the package will be limited to the value of the compensatory lump sum. In all cases, the maximum number of compensatory added years that can be awarded is the shortest of the following:

The number of years needed to make up the employee's pension scheme membership to 40 years
The period equivalent to the employee's service
The period between the date of cessation and the employee's 65th birthday; and 5 years

Pension Scheme Members – Mandatory Pension Scheme Benefits

Scottish Local Government Pension Scheme

Accrued pension benefits must be released if the employee retires on redundancy or efficiency grounds and:

has attained age 50, having been an active member of the Scottish LGPS on 05 April 2006, and

has at least 2 years' scheme membership, or
has completed less than 2 years' membership but has transferred in previous pension rights from outwith the Scottish LGPS

has attained age 55, and

has at least 2 years' scheme membership, or
has completed less than 2 years' membership but has transferred in previous pension rights from outwith the Scottish LGPS

Pension benefits are dependent on scheme membership.

Membership up to 31 March 2009 will be based on a pension of 1/80th of final pensionable pay for each year of service along with a lump sum payment, whereas membership from 01 April 2009 until 31 March 2015 is based on 1/60th of the annual pay, with no automatic lump sum. For membership from 01 April 2015, this will be based on 1/49th of pensionable pay. There is the opportunity to take a smaller pension in return for a larger lump sum.

Members of the scheme, who neither qualify for retirement benefits nor a refund, can leave their rights deferred in the pension fund for payment at retirement age. Alternatively, they can elect to transfer them to a new pension arrangement.

Employees are encouraged to contact the Pensions Section for further information where appropriate.

Scottish Teacher's Pension Scheme

Membership of the Scottish Teacher's Superannuation Scheme (STSS) on or after 01 April 2007 until 31 March 2015 will have pension calculated on 1/60th of the annual pay. Teachers who were in service before 01 April 2007 have their pension calculated at 1/80th. If there is a break in service however, some members may have mixed service based on both 1/60th and 1/80th. For membership from 01 April 2015, the Scottish Teacher's Pension Scheme (STPS), is a career average scheme and is based on an accrual rate of 1/57th of pensionable earnings each year.

Employees are encouraged to contact SPPA for further information where appropriate.

Under STSS and STPS regulations, Teachers cannot receive early access to their pension and receive a compensatory lump sum payment but, subject to age criteria being met, they can receive early access to their pension and compensatory added years. In a compulsory redundancy situation, Falkirk Council will ensure that all statutory entitlements are received.

Payment in lieu of notice & outstanding annual leave

In general, in cases where severance is granted by reason of efficiency or voluntary redundancy the employee will be considered to be leaving the employment of the Council by mutual consent so no notice will be payable. Termination dates will, in most cases, be by agreement, however the Council reserves the right to withdraw an offer if the termination date proposed by an employee is not suitable.

In compulsory redundancy situations, employees will in most situations be required to work their notice period. Where an employee is, for operational reasons, not required to work their notice period in a compulsory redundancy situation, they will be paid any outstanding pay in lieu of notice separate to the compensatory lump sum.

Services should ensure that employees take any unused annual leave entitlement prior to the agreed termination date, including those on term time contracts. In exceptional circumstances a payment in lieu of outstanding annual leave may be authorised in advance of the agreed termination date.

Tax and deductions

A compensatory lump sum may be subject to the deduction of income tax depending on the level of the termination package. Where an employee remains in a secondary post, their compensatory lump sum will be subject to tax and national insurance deductions.

Where an employee leaves their post under the terms of this policy and it is intended that they be re-employed under the limited circumstances referred to in general principles and considerations above, this should be notified to the Payroll Section prior to payment of the compensatory lump sum payment so that the payment can be treated correctly for income tax and national insurance purposes. Failure to do so will result in the Council becoming liable for the tax and / or national insurance deductions that are not deducted from the payment and this liability will fall on the employing service.

Where an employee leaves their post under the terms of this policy and there was no intention to re-employ but the employee is subsequently re-employed under the limited circumstances referred to in general principles and considerations above, this should be discussed with HR and / or the Payroll Section so that any retrospective liabilities can be assessed and settled.

It is a condition of this policy and a term of the employee's contract of employment that any outstanding payments due to the Council will be deducted from the final salary and/or compensatory package.

Impact of re-employment on pension

In the limited circumstances referred to in general principles and considerations above, where an individual is in receipt of a compensatory added years benefit and is re-employed, the benefit can be affected by the re-employment.

In addition, re-employment may affect the payment of the Scottish LGPS or STPS benefit. The individual should discuss these aspects with the Pensions Section or SPPA if appropriate.

Consideration will be given to the impact of Public Sector Exit Payments on re-employment where appropriate and necessary arrangements will be implemented.

Review process

Notification of appeal

Any employee who has been selected for redundancy can ask for the situation to be reviewed on the following grounds:

the application of the redundancy selection criteria;
the selection criteria have unfairly disadvantaged the employee;
the employee has not given a fair opportunity to put forward comments;
the policy has not been applied properly.

Employees must confirm their intention to apply for a review/appeal in writing to the Head of Human Resources and Business Transformation within 5 days of notification of selection for redundancy. This should set out the reasons that their case should be reviewed eg the grounds of their appeal and provide any evidence/documentation to demonstrate their case. This information will be available to all parties of the review.

On receipt of a letter of review/appeal, Human Resources will arrange a suitable hearing, providing a minimum of 3 days' notice in writing. The line manager will be asked to submit any relevant papers that may be referred to during their submission, copies of which will be provided to the appellant in advance of the hearing taking place.

Review hearing

The hearing will be chaired by an independent Chief Officer. Representatives from Human Resources and Governance will attend to provide support and advice to the chair.

The Appellants may be accompanied at the hearing by a colleague or their Trade Union representative. A representative from the appropriate Service will also be invited to attend the hearing to present the management case.

The Chair will introduce those present and ensure those attending understand the procedure which is to be followed during the hearing.

The appellant, or their Trade Union representative, will have approximately 15 minutes to present their case, after which they may be questioned by the Chair and the relevant Advisers.

Management's case will be presented by the relevant line manager. Again approximately 15 minutes will be provided to present management's case and the opportunity for questioning from the panel will be restricted to a further 5 minutes. Each party will have the opportunity for cross examination.

Management's representative, followed by the appellant or their representative, will then be provided with an opportunity to briefly summarise the key points of their case. No new evidence should be introduced at this time. The parties will then be asked to withdraw to allow the Chair to come to decide whether the appellants case is upheld or not. Appellants and managers will be advised in writing whether their case has been upheld or not within 5 days of the date of the review hearing.

Before closing the hearing, the Panel Chair will:

Ascertain whether or not the appellant considers that they have had a fair hearing
Advise the appellant that the panel's decision will be notified in writing at the conclusion of all appeals.

Severance policy monitoring and review

This policy will be reviewed, revised and updated to meet the needs of the Council by the Chief Finance Officer and Head of Human Resources and Business Transformation in conjunction with Service Directors and in consultation with the recognised Trade Unions as appropriate.