Redundancies at HSBC

10 June 2015: Sadly HSBC have announced it will be making in the region of 1,400 redundancies from head office and support staff before the end of the year. Chief executive Bill Dalton is reported to state that HSBC hopes that the majority of job losses will be achieved by natural turnover or on a voluntary basis and the bank will also be offering voluntary early retirement packages. The banking union UNIFI says that its aim is to avoid compulsory redundancies. However it seems likely that compulsory redundancies will be necessary.

HSBC will need to carry out group and individual consultation before imposing any compulsory redundancies. Where 20 or more employees are being made redundant over a period of 90 days or less, an employer has a duty to inform and consult appropriate employee representatives over a minimum 30 day period. Where 100 or more redundancies are proposed, consultation must begin at least 45 days before the first dismissal takes effect.  A tribunal may award up to 90 days’ pay in respect of each employee where there has been a breach of the information and consultation duty (called a protective award). 

The employer also needs to ensure that it has followed a fair procedure in relation to individuals, including consulting with them properly, otherwise claims of unfair dismissal may arise.  Just because a large number of redundancies are announced, it does not necessarily follow that all of those redundancies are fair. For example the redundancy selection pool (from which redundancies will be selected) may not be fairly based. HSBC will probably have a large number of different redundancy selection pools which it then applies. They may not apply fair, consistent or objective criteria to select staff for redundancies from those pools. The redundancy exercise may be used as an excuse to get rid of an employee for performance or other issues, when that person’s role is not actually redundant.  These are all issues that need to be looked at carefully when advising on redundancy, even if group consultation has been properly carried out.

For those staff that are made redundant by HSBC, they will be entitled to:

• A Statutory redundancy payment if employed for over two years (https://www.gov.uk/calculate-your-redundancy-pay )
• Statutory notice (if greater than contractual notice) which accrues at the rate of one year for each full year worked to a maximum of 12 weeks.  Many employers will opt to give a payment in lieu of notice.
• Payment in lieu of any holiday accrued but untaken to the termination date.

Employers often give an additional goodwill enhanced payment to redundant staff. Some employers have contractually binding policies on enhanced redundancy payments, though many employers state that enhanced payments are purely discretionary.

Other issues to think about carefully on redundancy are:

1. What happens to share options on redundancy?
2. What happens to Long Term Incentive Plans, commission or bonuses on redundancy?
3. Can staff adopt private medical insurance schemes paid for by the employer?
4. If a payment in lieu of notice is paid, will a payment in lieu of pension contributions also be paid?
5. Will post termination restrictions continue to apply on redundancy?

If you would like redundancy advice from an employment solicitor, whether you work for HSBC or anyone else, or you are offered a settlement agreement (www.reculversolicitors.co.uk/settlement-agreement/ ), do call for a free initial chat on 0207 118 0950 or email info@reculversolicitors.co.uk. See also  www.reculversolicitors.co.uk/redundancy/