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Wednesday, November 16, 2022
Elon Musk’s sweeping changes to the structure of Twitter have had a far-reaching impact on the 7,500 staff employed by the social media platform. Musk stated in a tweet on Friday 4th November “Regarding Twitter’s reduction in force, unfortunately, there is no choice when the company is losing over $4M a day. Everyone exited was offered 3 months of severance, which is 50% more than legally required.”
Ring any ferry company foghorns?
Latest reports indicate that the sweeping cull of half the workforce has had an impact we could have all predicted. A whole new level of crisis as staff working on business-critical matters had been shut out of the platform’s internal communications software. For many, it was the first indication that they had lost their job.
In a somewhat poor taste moment, a comedian took to TikTok claiming to be an employee sacked by Musk having received a rather unsympathetic email notification featuring a meme image of Musk and a message stating “Time to leave the nest”. The fact so many fell for the comedian’s “joke” as being genuine speaks of the chaotic way in which the new owner of twitter operates.
Unconfirmed reports by Bloomberg suggest that there have been somewhat desperate back pedalling by HR to ensure that critical services and projects can continue.
On Saturday 5th November, staff under threat of redundancy in the UK were notified that they had until Tuesday 8th November to nominate a representative, any current employee to represent their interests at a formal consultation about their future employment. Staff can nominate themselves if they wish.
To comply with UK employment law Twitter workers here were notified that the company intends to follow a formal consultation process ahead of determining any future redundancies.
The 3-day period to arrange representation is short and some say made more problematic due to the company withdrawing access to internal communication platforms. There are no legal requirements to set a minimum period for arranging such representation although in the circumstances a week or 5 working days would seem fair given Twitter announced this over a weekend.
The workers union Prospect has reported an influx of new members from Twitter including staff who have considerable concerns over their personal positions.
Early casualties, a day after the deal was done, were unsurprisingly at an executive level given the somewhat acrimonious exchanges between Musk and the Twitter board prior to the sale going through.
Founder and former CEO Jack Dorsey has publicly apologised with a tweet on 5th November in an attempt to reduce the heat. “I am grateful for, and love, everyone who has ever worked on Twitter. I don’t expect that to be mutual in this moment … or ever … and I understand.”
“Folks at Twitter past and present are strong and resilient. They will always find a way no matter how difficult the moment. I realize many are angry with me. I own the responsibility for why everyone is in this situation: I grew the company size too quickly. I apologize for that.”
The scale of the job losses follows hot on the heels of Musk’s controversial move to monetise the verification tick, historically associated with accounts of note, public figures, journalists and leading figures in their respective fields. It’s proposed that in future anyone who wishes to pay a £7.99 per month subscription will secure the tick.
Returning to the point of redundancy consultation, we understand that Musk is offering staff in the US a one-month severance payment. Several reports indicate that staff in the US have consulted lawyers and are considering action relating to the violation of the Worker Adjustment and Retraining Notification Act (WARN), this requires a company to provide a minimum of 60 days’ notice of redundancy.
There are also reports of claims being considered to challenge the discrepancy between Elon Musk’s previous agreement with the Twitter board to pay two months’ salary and the one-month of severance and what he agreed to pay before the merger.
As an employer, you may at some point find it necessary to consider redundancy measures, to ensure the long-term sustainability of your business. If this is an issue you’re concerned with right now, please note the key points to follow below.
The Process
When a company finds itself in such financial difficulties, the need to bring about a remedy is immediate and this can be at odds with what they are obliged to do in accordance with UK employment law.
If the decision to make staff redundant is followed by an all too eager rush to select and dismiss, the business can find itself on the wrong end of hefty time and financial costs in the shape of tribunal proceedings.
It’s therefore important to take a considered and methodical approach and where possible engage and involve your professional advisers to ensure no breach of the legal process occurs.
If you don’t consult employees in a redundancy situation, any redundancies you make will almost certainly be unfair and you could be taken to an employment tribunal.
You must follow ‘collective consultation’ rules if you’re making 20 or more employees redundant within any 90-day period at a single establishment.
There are no set rules to follow if there are fewer than 20 redundancies planned, but it’s good practice to fully consult employees and their representatives. An employment tribunal could decide that you’ve dismissed your staff unfairly if you don’t.
Checklist
- Consider the plan and the likely numbers involved and who needs to be notified. E.g. The Redundancy Payments Service (RPS) require completion of form HR1 if you are making 20 or more staff redundant.
- Follow a fair and reasonable redundancy procedure
- Consider whether employee representatives require to be elected/consulted
- Consult with employees on the business rationale for the redundancies
- Identify a redundancy pool
- Adopt fair selection criteria
- Before launching into formal redundancy options consider the alternatives such as :-
- Natural wastage
- Restrictions on recruitment
- Retraining and redeployment to other parts of the organisation
- Reduction or elimination of overtime
- Part time working
- Salary reduction
- Ensure you clearly document all the above
NOTE: If you fail to follow the above then any dismissal may be unfair.
The following is a link to the Government’s redundancy payment calculator: –
https://www.gov.uk/calculate-your-redundancy-pay
If your organisation is facing the prospect of cost savings which may result in redundancies, we would recommend an initial call to review your plans and help you through this process. Please do not hesitate to contact our friendly and supportive Employment Law team on 0191 232 8451 or email employmentdepartment@samuelphillips.co.uk
Written by Robert Gibson, Senior Consultant - Employment Law
Robert is a Senior Consultant at Samuel Phillips and specialises in employment and business matters. He advises in relation to employment and shareholder disputes, including pensions and related issues.
