EDUCATION BUDGET CUTS | Dealing with restructuring

Concerns about years of budget cuts have reached crisis point.

Hundreds of head teachers marched at Downing Street to make their worries known.

Head teachers have been forced to make difficult decisions, including increasing class sizes, cutting subjects and reducing or scrapping support services for vulnerable children and teenagers. Many have also considered making redundancies and looking at teachers’ pay to save costs. This may be the only way to keep afloat, but schools need to take great care to avoid legal pitfalls!

Reducing pay

If you do want to reduce pay as part of a restructure or school closure, it is important to be aware that teachers may be entitled to safeguarded pay if your teaching staff are subject to the School Teachers’ Pay and Conditions Document. If a teacher has a TLR 1 or TLR2, then such payments are protected or “safeguarded” for three years unless the TLR was awarded on a temporary basis and that period has come to an end. Similarly, if you are looking at reducing the pay of the leadership group or teacher on the pay range for leading practitioners, pay may be protected for three years  Different rules apply for teachers who took up their posts on or after 1 January 2006 and teachers who took up their posts on or before 31 December 2005. As the rules are complicated you should seek advice for your specific circumstances and contact your Employment Law Adviser for guidance.

Carrying out redundancies

If you are in a genuine redundancy situation (i.e. you are closing the school for which the employee was employed), you need to ensure that you adhere to a number of rules to carry out a fair redundancy procedure.

In the case of small-scale redundancies(fewer than 20 redundancies in 90 days at a single establishment), you must warn employees of potential redundancies; create and apply fair and non-discriminatory scoring selection criteria, consult with employees and think about suitable employment options.

In the case of large-scale redundancies (20 redundancies in a 90 day period at a single establishment), you also need to comply with more stringent consultation obligations. This includes consulting with the recognised trade unions or, if none, with employee representatives, informing the Secretary of State for Business, Innovation and Skills of the fact that 20 or more redundancies are being proposed in a 90 day period and writing to the appropriate representatives detailing information about the proposed redundancies.

If the employee has two years’ continuous service, they are eligible for statutory redundancy pay. The amount they receive will depend on their age, pay and their length of service.

The Redundancy Payments Modification Order (Local Government) 1983 makes local government, maintained schools and academies associated employers for the purpose of calculating statutory redundancy pay. This means that if, for example, an employee transfers to an academy, their previous length of service may be used to calculate redundancy pay. If you do not pay this statutory payment or a contractual payment, you can leave yourself open to claims. You should also check whether making an employee redundant triggers any lump payment due to their age under the Local Government Pension Scheme or Teachers Pension Scheme, as that could impact the savings you were hoping to make.

Three things schools should remember:

  1. Pay protection may hamper your plans to cut costs amongst staff.
  2. When carrying out redundancies, you need to think about whether there are specific rules that affect certain groups of employees. For example, in the case of pregnant employees or those on maternity leave, there are extra protections. When creating selection criteria, be careful when considering an employee’s absence record – absence due to maternity leave or pregnancy should not be counted.
  3. Seek Employment Law Advice at the earliest opportunity to make sure you make informed decisions and are fully aware of the risks and processes involved.

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