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Cut-off dates for severance

Bev Curtis points out the legal pitfalls lying in wait for schools trying to cut their staffing budget by shedding teachers.

The largest part of any school's budget is spent on staffing and if the budget is tight then invariably it is the money spent on staff that comes under scrutiny. Since the largest part of the staffing budget is spent on teachers, governing bodies may be forced to consider reducing the number they employ.

Some schools may be able to solve the problem by "natural wastage"- if someone retires, resigns, gets promoted or moves, he or she is not replaced. However, the governors cannot afford to live in hope and must take steps to manage the situation within the time scale even if it means withdrawing a redundancy notice at a later stage.

Delay can be very costly. Teachers can only be dismissed on grounds of redundancy under the terms of their contracts at three dates in the year: the notional end of each term, August 31, December 31, or April 30. In addition there is a statutory entitlement of one week's notice for each year of service up to 12 years. So a teacher with 12 years' service who is to be dismissed by December 31 would need to be given notice by September 30. If the governing body does not complete all the necessary steps in time to give proper notice (contractual andor statutory), for example by May 31 for a dismissal date of August 31, then the school will be liable for salary until December 31 which will cause further pressure on the budget.

Once the governing body, probably through its finance committee, identifies a need to reduce expenditure, the next decision is whether a reduction in the staffing budget is necessary. This decision will probably be made around the end of February when the budget for the next financial year has been determined. Because of the contractual and statutory notice period, it is unlikely that it would be possible, even if it was desirable, to terminate a teacher's contract at the end of the spring term (April 30).

The only exception would be a teacher on a fixed-term contract which ended on or before April 30 where the decision was taken not to renew it. It must be remembered, however, that the non-renewal of a fixed-term contract is a dismissal and if the reason for the dismissal is redundancy then the governing body must follow proper procedures in accordance with employment legislation The guidance set out below is therefore based on the assumption of the most likely situation: that the reduction is to be achieved by August 31.

One of the effects of the 1988 Education Reform Act has been to end formal redeployment arrangements for school staff. Local education authorities can no longer require a governing body to appoint a member of staff under a redeployment arrangement. Any previous agreement between the LEA and the unions representing school staff cannot operate for the redeployment of staff without the agreement of the governing body. But that does not mean that arrangements cannot be made to deploy staff sensibly within an LEA's schools and indeed many problems are solved in this way.

The first step As soon as the governing body identifies the need to reduce the teaching andor support staff budget, the recognised trade unions for staff at risk must be consulted even if, at the time, no staff in the school belong to a particular recognised union. (The recognised trade unions will be those recognised by the LEA in the case of locally managed schools and by the governing body for a grant-maintained school).

Employment legislation (Section 188 of the Trade Union and Labour Relation (Consolidation) Act 1992) requires that the recognised trade unions are consulted "at the earliest opportunity" where it is proposed that fewer than 10 employees are made redundant.

The governing body is responsible for this consultation in accordance with the requirements of the 1988 Education Reform Act. Failure to consult could lead to the unions seeking a protective award from an industrial tribunal and at best cause a 28-day delay in dealing with the redundancy.

In addition, under European legislation, which affects UK legislation, consultations should "cover ways and means of avoiding collective redundancies or reducing the number of workers affected". Consultation must therefore be meaningful. The requirement, however, is to consult, not to negotiate. But the governing body should give the trade unions a written explanation if suggestions put to it by the trade unions are not accepted. The consultation period should be of sufficient length to enable proper consultation to take place.

The headteacher on behalf of the governors will need an accurate and detailed curriculum analysis, a staffing plan to deliver the curriculum and accurate and detailed financial information. The reasons for the redundancy should be demonstrable from this information. A timetable should be agreed so that it can be decided when the compulsory selection will need to start in the absence of an appropriate volunteer or other solution.

The chair of governors will need to be kept fully informed in preparation for the consultations with the trade unions.

The selection criteria for redundancy should be determined by the head in consultation with the chair of governors. At this stage no identification is being made of any individual to be dismissed; it is the criteria for selecting an employee, if it becomes necessary, which are being determined. Alternatively, the criteria could be determined by the personnel committee, with the head given the remit to act in accordance with the criteria.

In considering unfair dismissal claims, industrial tribunals often start from the position that it is normal to expect the employer to be loyal to the longest-serving staff and therefore take the view that the most significant criterion will be "last in first out". Such an approach will not normally be appropriate in a school, however, but if different criteria are used the school may need to demonstrate that they are more important.

The criteria commonlyused in schools are: * Curricular, pastoral and management needs of the school; * Volunteers * Fixed-term and part-time contracts * The skills, experience and recent and relevant training ofstaff affected.

The governing body must set up two panels to deal with any dismissal for redundancy: the dismissal panel and the appeals panel. Each panel is made up of at least three different governors, with the same number of governors on the appeals panel as on the dismissal panel. The chair of governors, if she or he is being consulted by the head as suggested above, cannot be a member of either panel. The governing body must formally minute the delegation of the power of dismissal and the power to consider an appeal against dismissal to these panels.

The second step If it is not possible to avoid a redundancy following the consultation period then it will be necessary for the head to apply the criteria for selection. Any volunteer should be acceptable in the context of the curricular, pastoral and management needs of the school. Staff may volunteer to accept redundancy on the grounds of early retirement (ie people aged 50 or over) or just to volunteer for redundancy (people under 50). The benefits are much improved for school employees who are aged 50 or over and who are members of the appropriate pension scheme.

In addition to the statutory redundancy payment made to an employee, these employees may be granted an enhanced pension.

A locally managed school should consult the LEA about any scheme that is available and who is responsible for paying the benefits. A grant-maintained school should consider its own policy, which will probably have been dictated by what the school inherited under the transfer arrangements from the LEA. Any enhancement of pension has an ongoing cost which will fall to the school's budget in a GM school. A GM school declaring a redundancy under the initial restructuring grant on becoming grant maintained, may be able to recoup this cost from the Department for Education.

The head should review the employment of any staff on fixed-term or variable hours contracts. In the light of recent industrial tribunal and Law Lords' decisions, care should be taken to ensure that part-time staff are not treated any less favourably than full-time staff. To select a member of staff on the basis that she or he is part-time could leave the school open to a successful claim for unfair selection for redundancy since it could be regarded as indirect sex discrimination.

The third step In the absence of any alternative solution, once the head has sought volunteers and reviewed any fixed-term and variable hours contracts, the head will need to make a compulsory selection by applying the remaining criteria.

In a secondary school the head will identify the curricular areas from which the reduction can be made and apply the criteria within those areas. This part of the process will identify a smaller group of staff from which the final selection will be made. The head should then arrange meetings with each of those members of staff, who may be represented if they wish, at which the individual can discuss the redundancy selection and provide information relevant to the selection criteria, for example about his or her own skills, experience and training.

The head should then write to the employee who has been selected, indicating that the intention is to recommend to the dismissal panel that the employee be dismissed on grounds of redundancy. Normally 10 working days' notice should be given of: * the date, time and place of the hearing * the right to attend the hearing and to be accompanied andor represented The employee should also be advised that if the recommendation to dismiss is accepted then there will be a right of appeal.

The fourth step The recommendation of the head will be presented at a hearing of the dismissal panel of the governors. The employee (or representative) will be able to cross-examine the head and any witnesses called to support the recommendation and to put reasons to the panel why the selection should not identify him or her. The panel will have the opportunity to question the head on the criteria for selection and how those have been applied and will need to judge whether the selection being recommended to it by the head is reasonable in all the circumstances.

If the panel decides to accept the recommendation to dismiss, then the employee will be informed that the decision is to dismiss him or her on grounds of redundancy and that there will be a right of appeal to a second panel of governors. An appeal should normally be lodged by the employee within 10 days of the hearing.

If an appeal is not upheld, then the employee will be given notice of dismissal in accordance with his or her contract of employment. The notice of dismissal will be issued by the governing body in the case of a grant-maintained or aided school and by the LEA where the school is locally managed.

The employee has no further right of appeal under the terms of the contract of employment, but if she or he has statutory rights under employment legislation and the employee believes there is a case of unfair dismissal or unfair selection for redundancy then there is a right to make an application to an industrial tribunal.

Governing bodies are strongly advised to seek advice from persons suitably qualified and experienced when dealing with a reduction in staff.

Bev Curtis is a director of Education Personnel Management Ltd (Telephone 0480 431993)

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