Unequal redundancy package offers at subsidiary of international companie

I work for one of several UK subsidiaries of a large international company. A couple of years ago the company decided to pool all subsidiaries at one geographical UK site (whilst keeping them as separate legal entities). My subsidiary was an exception as the parent company decided to retain the original site whilst moving some staff to the new site. The intent was originally also to hire more staff in order to expand the subsidiary.

Last year the staff selected for relocation were consulted and offered a generous relocation/redundancy package. This was, and still is, listed on the company intranet as applying to all employees of my subsidiary selected for relocation. The moving date was set for this summer. The staff in our subisidary are all highly educated technical experts with different specialisations but with similar employee grades.

Recently due to changed economic circumstances, the parent company cut the budget of our subsidiary. The number of new hires for our subsidiary was reduced, and the company decided more staff needed to be moved to the new site. We were informed of this 2.5 months before the set moving date. However, we are expected to move on the same data as the original batch of staff.

The subsidiary management has stated that due to budget constraints, newly relocated staff will not be offered a relocation or redundancy package. They would prefer to receive volunteers to commute to the new site with the potential promise of an undefined relocation package occurring next financial year (one full year away). For most the commute would be 4-5hrs per day. The relocation package for the original batch of staff remains unchanged, and they will move on the same day as us.

However, prior to this news they asked us to sign modifications to our contracts cutting travel subsidies and enforcing longer, rigidily inflexible working hours. We have signed these modifications as we were told that without doing this we would not receive any future pay reviews (ie: a pay freeze would be instigated). These modifications have made it very disadvantageous both financially and personally to volunteer to relocate/commute to the new site without assistance. It is unlikely therefore that many people will volunteer.

We have heard unofficially that if not enough volunteers are received, staff will be made redundant to allow new hires to be placed at the new site. Again due to budget constraints, it is unlikely that anything other than statutory redundancy will be offered. This is very much less than offered to the original batch of staff selected for relocation.

I am interested in two points:

(1) Is it legal to treat staff differently within the same company with regards to redundancy/relocation packages given that we are all at a similiar employee level and moving to the same place on the same day?

(2) The other UK subsidiaries of the parent company are well funded and the parent company itself is profitable. Overall headcount is also increasing in our subsidiary although not by as much as originally was intended. Can the company refuse to offer us the identical relocation package to our colleagues simply on budgetary grounds?

Hi jtomes

It sounds like your employer can probably justify their actions. The first lot of staff to be relocated were offered a package at that time to move (in good times). There is probably an argument (depending on paperwork, etc) to say that they have entered into a contractual agreement with those staff which they cannot readily now rescind.

This time round they are looking for volunteers to commute initially and if they can't get enough volunteers they will recruit at that location and make people at your current location redundant, if I have understood correctly.

In answer to your specific questions:

1. Yes, they may be able to justify offering different redundancy packages unless the one they offered previously is a contractual entitlement. If it is written down in a staff handbook and has been used many times before, for example, you may be able to argue it is a contractual entitlement.

2. It is possible that your employer can justify the offer they have made. As they have broken down the Group into various companies, they will be able to argue that any financial decisions affecting you should be made in light of your company's financial position, not that of the overall Group.

Sorry this is not what you wanted to hear and obviously without having much more detailed information it is difficult to be more specific.

Regards

Pete