Unpaid Leave and Redundancy

[Pauline Ferguson]

As with many organisations at present we are facing the unfortunate situation where we are having to make people redundant. As an alternative one of our staff members has posed the idea that they would like to take a sabbatical for 6 months (unpaid).

This proposal would work for us and we are most definitely open to considering this however I have a couple of questions for clarification:

As this has been proposed by one of the people that are at risk for redundancy, would we have to offer this as an option to other employees that are at risk for fairness and treating everyone equally?

If in 6 months time we are still in a precarious situation and the role(s) are still at risk of redundancy, would their statutory redundancy payment be calculated on their length of service at the revised date of redundancy and the weekly rate that they were on prior to the unpaid leave? I am little confused as to the weekly rate that we would use as they haven't been paid for 6 months.

Any help on this would be greatly appreciated, thank you.

 

[Rebecca_J_T]

Hi Pauline. Sorry for the slow reply.

It’s good to hear that you and your staff are working through this difficult time together, and exploring these sorts of alternatives.

Unpaid leave/sabbatical certainly is an option (suspect this is obvious and you haven’t mentioned it, so I’m just covering the bases!) but unless you’ve specifically given yourself this right in your employment contracts, you won’t be able to *insist* on any employee taking unpaid leave. They’d be entitled to redundancy.

Like you, I think I’d be tempted too to offer every employee the same option as the employee in question of sabbatical rather than redundancy.

You’ll want to be super clear in writing about the terms of the sabbatical (Can the employee work elsewhere? For competitors? How do you call them back? Notice periods?) - let me know if you need a hand with that at all.

In terms of whether a sabbatical would break the employee’s continuous service from the POV of redundancy, this is actually up to you because a sabbatical isn’t actually recognised in law. You can either:
1) terminate the contract when the employer goes on sabbatical and then re-employ or
2) continue the employment throughout the sabbatical.

Obviously under the former, if you re-employed in 6 months, you’d be “re-setting” the start date and so there’d be no redundancy entitlement. I think you’re probably thinking more of the latter, in which case the continuous employment start date is as currently, and the pay would be as currently.

Either way, you’ll just want to capture these details and other terms in some sort of written agreement ahead of the sabbatical.

Hope this helps, but as I say, happy to help if you need anything further!

Rebecca