Bishop & Sewell

The UK government recently warned Twitter that ‘no one, least of all big tech, is above the law’ after its widespread redundancies with little or no advance warning. In November, Twitter dismissed more than half of its workforce, laid off around 5,000 contractors and issued a stay or leave ultimatum depending on whether employees wanted to sign up to a hardcore work culture. In response to this, around 1,200 employees resigned. This has been followed by significant redundancies at Meta and other tech companies.

The unfair dismissal laws and rules around collective redundancy consultation exist for a reason. A formal process needs to be followed if employers are to avoid penalties and compensatory awards in collective redundancy situations, says Rhian Radia.

Twitter is facing close scrutiny following a brutal redundancy programme. Many of those made redundant found out they no longer had a job by email when IT systems no longer worked or access to office premises was barred. Remaining employees were given the ‘option’ to sign a pledge to be part of the ‘new Twitter’, warning that ‘this will mean working long hours at high intensity. Only exceptional performance will constitute a passing grade’. This ‘new Twitter’ could not be more out of touch with the times.

Elon Musk sought to justify the move saying the business was losing US$4m a day and offering dismissed staff three months’ severance pay.

It is by any corporate standards a move that shows very little empathy for its workforce, many with long loyal service. The impact on the lives of Twitter’s workforce and its longer-term reputation is not lost.

Offering severance pay and assuming that this will solve any issue or breach of employment law is too simplistic. Not all employees will accept a severance offer and this should never be assumed when there is a point of principle at stake. Even when the Employment Tribunal system is suffering backlog and delay.

Redundancy process

Businesses have a legal duty to consult staff if redundancies are likely. A minimum consultation period of 30 days is required where 20 or more people are likely to be made redundant in a 90 day period, rising to 45 days if 100 people or more are likely to be dismissed.

A business must consult with a trade union where one is recognised or with existing employee representatives. If no employee representatives exist, they must be elected specifically for the purpose of the consultation.

Consultations must include the reasons for the proposed redundancies, how they will be carried out, how individuals will be selected and how redundancy payments will be calculated. Importantly, consultations must also address how redundancies can be avoided or minimising the number of redundancies.

There are extremely limited exceptions to these requirements, which in most cases involve insolvency.

A cost to getting it wrong

Businesses that fail to consult with their employees in a redundancy situation could expose themselves to group actions from employees. There is power in numbers and certainly strong feeling amongst the tech employees. Twitter is not Tesla by its very nature. It is not surprising that employees of a social media platform are speaking out.

Incidentally Elon Musk had form when at Tesla complaining about a lack of weekend working. The hardcore working culture is entirely at odds with the post pandemic work culture shift where retention and offering flex is a key issue.

In addition to unfair dismissal claims, Employment Tribunals take a dim view of organisations that fail to collectively consult, exposing businesses to a punitive damages of up to 90 days’ pay per affected employee.

Businesses also have a responsibility to inform the Department for Business, Energy & Industrial Strategy (BEIS) when 20 or more redundancies are planned and before they are made. Failure to do so can result in an unlimited fine.

And then there is the reputational fallout. This does matter now. 1,400 Twitter employees flocked to Blind to write reviews about their employer. They could not be silenced.

The loss of senior engineers and developers could leave a major, and potentially unrecoverable, void in the Twitter ecosystem.

The human element means that this could prove a more complex acquisition in more ways than Elon Musk may have imagined.

Contact our Employment Team

For initial advice or to arrange a meeting with one of our Employment team, please email or call on 020 7631 4141.

The above is accurate as at 24 November 2022. The information above may be subject to change during these ever-changing times.

The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis.

Category: Blog, News | Date: 29th Nov 2022

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