Fixed Contract

We are a very small company who have closed down a portion of our business as one of our contracts has come to an end. Everybody knew at the outset that the work was fixed term for 3 years (client, us and staff) and my question is whether redundancy still applies. I have read that redundancy need not apply "if a fixed-term contract with an employer expires, is not renewed, and there is a genuine diminution in the overall need for employees."

Can anyone advise me if this is correct or if I need to pay? Also, is there a time frame for paying redundancy?

Yes, it still applies. Ibn all aspects. You must still carry out a full redundancy process (with the consultation process depending on the numbers of redundancies), seek any possible alternative employment available, and pay redundancy pay. You should also note that if the employees on fixed term contracts do jobs that other staff not being made redundant do, there may be an argument for all relevant staff to be included in any pool. Making staff redundant because they have they have fixed term contracts is also potentially unlawful.

And you pay redundancy when people are redundant.

We have another 2 members of staff working at another office, who weren't on this contract...are you saying ALL staff had to have been considered, even though these are the only two affected by the contract changes?

Quite possibly yes. What contract or work someone works on isn't relevant - if they do broadly the same role then it may be unfair dismissal / unfair selection for redundancy if you do not include them. Let me make it simpler for you to understand. You have two secretaries in X section and 2 in Y section. But they are all secretaries. X section closes, but there is no reason why the secretaries from there cannot do the job of secretaries in Y section. So you would have to pool them all and select two from the four, using fair and objective criteria. So "Boss B likes Sally and wants to keep her and doesn't like male secretaries, so Bob is a goner" - that simply won't wash! Obviously. Nor will Sally has always been in Y. My advice would be that if the jobs are at all similar, then yes, you should undergo a process to select from the wider pool.

I'll give you another piece of advice for the future - fixed term contracts are pretty worthless to employers these days, and can actually be more problems than anything. As you are finding out. Employees on fixed term contracts have all the same rights as permanant workers - the distinction is meaningless these days. But did you know that if you slightly get it wrong, and I do mean slightly, you can be sued for the whole amount of wages and benefits of a fixed term contract? Any clued up lawyer or HR person would tell you that the only purpose of a fixed term contract now is if you have a very unique, specific, short term role to be carried out. Once anyone gets past the one year mark, the difference is so slight as to be not worth the hassle. They are a hangover from days gone by when fixed term workers had no redundancy rights (and few others either). They refuse to die - but they should.

My solicitor didn't tell me any of this! So what do I do now? How can I redress the fact they have been made redundant without offering redundancy to all the staff? Can I say "sorry I made a mistake" and do you want to be considered for the other posts or be made redundant? We have tried ot do what's right but it's a nightmare. IF I pay them redundancy now, can they decide to take us to a tribunal later for unfair redundancy or would that be the end of the matter?

Ok. First off - your solicitor is probably a generalist. I won't try to sort out your buying a house, s/he needs to stay out of things that they don't know! Sometimes lawyers like to think they know the lot. Nobody can. I know next to bothing about conveyancing, or criminal law. So learn the lesson in future. Get specialist advice. And nothing replaces learning at least some of it yourself - you coulodn't possibly learn all the nuances, but you can learn enough. Mothing I have told you today isn't available freely on the internet. If you have already told staff that they are redundant, then you have two choices. One is to go with the flow and continue, and hope that nobody challenges it. Getting it wrong isn't the sin - getting caught is! being a small employer, you get some lattitude with a tribunal if it goes there - but never rely on that again as a get out. Most employees have as little experience as you do, and they may not know. Your second option is to restart the process - confess you have been wrongly advised and start again. You would not be penalised by a tribunal for doing this, providing you get it right this time. That is a judgement call - only you can make it.

Another piece of unsolicited advice here. Half the employers in the world think that trades unions are baddies. Half of them are wrong. If you genuinely want to be a good employer and do the right thing, encourage your staff to join a union and recognise a union for negotiations. Small you may be, but no union will sniff at recognition because of that.Unions mediate the crap! They aren't against you, or pro-employees who don't have a leg to stand on. Prettyu much most union reps would have told you - for free - what you were doing wrong! OK - they would have done so to protect their members interests, but who cares if they are right?

At this stage, whatever you decide about what you are going to do - you must adhere to redundancy payment laws. You must pay at least the notice the staff are entitled to (although this may be worked notice) -or their contractual notice if that is higher- and then you must pay them a minimum of the statutory redundancy payment. That is the least that the law expects of you. And if this solicitor has been giving you other employment law advice - I suggest that you check it all to make sure that it is correct and that you understand it.To paraphrase Oscar Wilde - "to screw up once is a tragedy. to screw up twice is carelessness"

She was supposed to be an employment solicitor. Oh well, that's what you get for trying to stay local. At first we thought TUPE applied which is why we did not go through the redundancy process in the first place. On Monday, the solicitor told us it did not apply but because they were on a fixed term contract their employment "had come to a natural end". Naturally we took the advice of our solicitor rather than what I had read on Google. However, today she mucked up the redundancy calculation and I had serious misgivings about all her advice, hence my visit here.
We have tried to do everything by the book and another solicitor I spoke to today said that we could not "undo" the letter we sent on Monday following our first solicitors advice. I do not want to act illegally (on moral grounds as well as financial) and don't know how to proceed because to be frank, I don't know what is good advice (other than what I have read from you)!
Maybe TUPE exists after all? I am very confused.

I don't want to pay redundancy and "hope for the best", I want to do things right.

Oh my God. Why did you think TUPE applied? Has the client taken the service / contract back in house? Or awarded it somewhere else? Because if so, then you were initially correct - there is a very good chance that TUPE may apply. Being on a fixed term contract has no relevance to TUPE. Or, as I said before, much else.

Your second solicitor is wrong. If an employer makes a mistake then they are entitled to put it right.

PS - I know you are worried about this - I have to go right now but I promise I will come back tomorrow morning.

This is a terrible mess and I appreciate your input. This is the situation and I would value your opinion:

We had a 3 year service level agreement with a specialist school run by Childrens Services (who are part of the County Council) to provide activities which formed an integral part of the special school curriculum. The children from this school were 95% of our business and the sole reason we set up the business in this area and employed these members of staff. As part of "restructuring" the County Council tendered out the specialist school provision and the contract has been awarded to company X. At the end of July all contracts with the County Council ceased to be (including ours)

This is why I thought TUPE applied (although the first solicitor has now put doubts in my mind):
TUPE applies to the people delivering the service; they were delivering the service to the client group which has now been transferred to company X via the new tendering process.

Company X are saying TUPE does not apply because our contract/service level agreement was held directly with the independent school and not directly with the County Council.

In your opinion, does TUPE apply? If it does what do we do?

If TUPE doesn't apply and we have to reinterview for the remaining 2 positions and one or both the the "limbo" employees is successful, do we have to pay mileage from their old base to the new one a kind of "relocation" as the bases are 30 miles apart? Is the fact the bases are so far part, a good enough reason for our redundancy selection? In addition to this as our work is "client based" and staff work hard to build a working rapport with the children; this was also an important consideration in our selection.