Managing change policy

Policy overview

We aim to develop as a high performing, sustainable local authority. Forward planning helps safeguard the employment of employees throughout any changes.

We acknowledge that change can be difficult for employees. We support employees affected, and the managers implementing change.

We will manage any change situation with care and sensitivity to all employees. It will be in line with the core values and the standards set out in our diversity and inclusion policy.

This policy sets out how we manage the organisational change that affects groups of employees. It can be in situations where:

roles and responsibilities in a service area are being re-aligned, or varied
the size of the workforce in a service area is reducing
redeployment and redundancies may occur as a result of these changes

This policy and supporting policies ensure we identify the need for change and manage the transition.

The supporting policies include the redeployment policy and retirement policy, including flexible retirement. We will make all actions in accordance with the change management agreement developed with Unison.

Managers will get approval of any proposed restructure from the director leadership team (DLT) and the corporate leadership team (CLT). This will include an agreement with finance on how to cover any potential redundancy costs, before any such exercise starts.

Principles

We must review how we provide services. We recognise that working with employees and trade unions is the most effective way of managing change. We will consult with the unions to try to manage changes through voluntary measures and the application of the supporting policies and procedures. The main principles of these policies are:

to have full open consultation with employees and trade unions at the earliest stage
clear communication processes
compliance with employment law
commitment to our diversity and inclusion policy

Where a change or restructure arises, we will ensure that:

our processes comply with all employment legislation and our policies, including equality and diversity
we complete an equality impact assessment as early as possible on the proposed change or restructure
we consult employees and their representatives on any proposals and implementation
we base selection for redundancy on clear criteria
we offer reasonable support and advice to employees who wish to consider redeployment, or who volunteer to take redundancy to help find suitable work when their employment comes to an end

After addressing all voluntary measures, we may consider compulsory redundancy, as a last resort, as described in the change management agreement.

Change management agreement

Introduction

The change management agreement is between us and the Lincolnshire county branch of Unison. It applies to all employees under the terms and conditions determined by the NJC for local government services as supplemented by the Local Scheme.

The agreement does not apply in schools, where governing bodies are responsible for working arrangements.

There will be periodic review of the document to ensure its principles and procedures remain relevant to the needs of LCC, employees and representatives. Any future changes will require the agreement of both parties unless dictated by legislation.

Aims of the agreement

This agreement applies to structural and organisational changes. These decisions may lead to the reduction of employee numbers or alterations to contracts of employment.

This agreement aims to:

ensure change is managed fairly and effectively
provide a clear procedure for the management of change
ensure changes follow accepted good practice and fall within our health and safety procedures
encourage agreement of all parties by using a consultative approach
recognise our responsibility to make reasonable efforts to offer suitable alternative employment to affected staff
maximise flexibility in the deployment of staff and to provide training for the purpose
recognise us as a single employer embracing all director areas

Consultation

We will consult employees and unions on proposals involving organisational change before making decisions. It allows time for the consideration of suggestions.

The following consultation periods apply for the expected number of redundancies:

where there are expected to be less than 20 redundancies the consultation must start at least 14 days before any dismissal
where there are expected to be 20 to 99 redundancies - the consultation must start at least 30 days before any dismissals take effect
where there are expected to be 100 or more redundancies - the consultation must begin at least 45 days before any dismissals take effect

Procedure

Consultation should start at the earliest opportunity. At first this would be through informal discussion with employees and Unison. Informal discussions give affected employees the chance to consider and comment before the formal consultation begins.

Formal consultation with employees and unions will take place, with a view to trying to reach an agreement, before the executive director makes the decision.

Line managers will consult with individual employees where changes can be achieved within existing contracts of employment. Where appropriate, director area union representatives should be included.

Implementation

There are five steps to follow to implement changes in organisational structures. We aim to avoid compulsory redundancy where possible.

Executive directors, or their representatives, will:

identify the posts and the areas being affected
carry out an impact analysis assessment
consider change mechanisms, eg, by natural wastage, restrictions on recruitment
consider voluntary solutions such as early retirement, redundancy, reduction in hours, job share
operate the redeployment procedure

The process

When we determine the positions in the new structure, existing employees should assimilate into the posts. We will take into account their expressions of interest, including voluntary solutions. Assimilation must take into account the extent to which those employees will meet the essential requirements of the job.

Employees affected by restructuring are entitled to discuss their interests and concerns with management. A work colleague or recognised trade union representative or official can accompany them.

Where the number of posts in the new structure is exceeded by the employees affected, it is likely that we will use ring-fencing. This will give such employees priority in applying for available posts. We will reach an agreement with the relevant unions on:

the method of selection to the newly-established post
any ring-fencing arrangements

During the assimilation process, we will safeguard the interests of employees who want alternative roles and to continue with the council but are not likely to find a role in the new structure. The executive director is responsible for this.

As a matter of principle, it should be agreed that, we will not make any significant promotion in a new structure at the expense of a redundancy elsewhere in the organisation. Where possible, the concentration of job losses should not centre on one group of employees (for example, lower-graded posts).

At-risk status

Once the position is clear and after consultation with the Executive Director of Resources, the Service Executive Director will declare those employees who have been, or who are likely to be displaced, as ‘at risk’.

Employees on fixed-term or temporary contracts will not receive at-risk status if their contract is reaching its fixed end date.

These employees will be eligible to apply for any vacant posts. They will not receive the prior consideration for posts that at-risk status provides. The exception is employees with at least four years of continuous local government service.

Employees on fixed-term or temporary contracts are eligible for redundancy payments. These are subject to certain qualifying circumstances.

For more details, read our fixed-term and temporary contracts policy.

We will try to ensure that we declare at-risk status in time for affected employees to find alternative employment, within or outside the council.

Executive directors will retain the right to recruit from outside the defined area. That is if it is clear that the existing employees in that area cannot meet the requirements of the post. In these circumstances, we will explain the reasons for this, both to at-risk employees and their union.

Lincolnshire County Council (LCC) has responsibilities in law as a single employer. Whilst Executive Directors hold prime responsibility for the recruitment and dismissal of employees, LCC has a statutory duty in redundancy situations to minimise the effect of redundancy and to actively consider whether suitable alternative employment exists and if such alternative employment is offered, it is offered subject to an appropriate trial period.

A redundant employee has a shared responsibility with us to look for suitable alternative employment. To maximise redeployment opportunities, employees must adopt a flexible approach when considering alternative posts.

Following the completion of the formal consultation, there may be a requirement to redeploy affected employees. Employees displaced as a result of change may be interested in voluntary redundancy or early retirement, reduction in hours, or job sharing.

For more details, read our:

At-risk employees have a right to prior consideration for appointment to any vacancy at the same or lower grade than their existing post. They must meet the essential requirements or would do, given suitable training. Prior consideration means that the employee is entitled to an interview before any other candidate.

Where at-risk candidates meet the essential requirements of the post, we should formally appoint them. If they are not appointed, the recruiting manager must inform the employee with reasons why, in writing, before making another appointment.

Where we make an offer, the employee gets a reasonable time to reach a decision and to discuss relevant issues or concerns. We will implement the proposals after all parties agree.

Employees who are under notice of redundancy have a statutory right to a trial period of four weeks in an alternative job. This applies where the provisions of the new contract differ from the original.

If by mutual agreement, we cannot achieve redeployment, we may offer at-risk employees a transfer to another post. This offer will be the responsibility of the employee's executive director, after consultation with the recognised trade union.

The offer for transfer will not be arbitrary and will take account of:

qualifications, experience, ability and aspirations
personal circumstances
the status of the post offered
whether the employee is following a course of study for a qualification

If the alternative employment is mutually agreed to be not suitable executive directors, or their representative, will discuss any appropriate redeployment opportunities which may exist at the time with the employee.

If an employee unreasonably refuses an offer of suitable alternative employment, we will withdraw the provisions of the policy and entitlement to a redundancy payment.

Employees previously redeployed through organisational change, who are on salary protection, will have a right to an interview. They must meet the essential criteria of any vacancy at the same grade to their previous post.

We will class the interview as at-risk. The vacancy must occur within two years of the original redeployment. The employee must not have moved house with assistance under the relocation scheme.

Support

Salary protection

Salary protection applies to an employee who accepts a post on a lower grade as a result of restructuring or change in the workforce. There will be no protection on a reduction in hours.

Salary protection will apply:

for a maximum period of two years
with a limit on the maximum protection available of £3,000 (pro-rata for part-time staff)
with the existing salary immediately frozen. We will not pay increments or pay awards until or unless the substantive grade maximum exceeds the protected salary

After two years, we will adjust the salary paid to that payable at the maximum of the substantive grade.

Other support

The application of the scheme of disturbance payments
Protection of pension, where appropriate, shall be by following local government pension scheme regulations in line with the Pension act 2004
Employee support and counselling service

If an employee feels we have unfairly applied the measures to them, they may seek redress through the grievance procedure.

Whilst confirming their commitment to the agreement, both parties retain a right to terminate by giving a minimum of six months' written notice.

Redundancy

When an employee is facing redundancy, the manager will request an estimate of any applicable redundancy payment.

Members of the Local Government Pension Scheme (LGPS) will also get an estimate of the accrued pension benefits. They must be aged 55 or over at the proposed date of redundancy.

A redundancy payment may be due when a temporary or fixed-term contract ends, and we do not offer the employee a contract renewal.

This is a dismissal, however, the entitlement to a redundancy payment depends on whether:

the employee has completed two years' service (if not, there is no entitlement)
the reason for the decision not to offer renewal of the contract is redundancy

If a fixed-term contract is to end early, entitlement to a redundancy payment will apply. It will also apply where an employee has transferred from a permanent to a temporary or fixed-term contract.

We must offer a suitable vacancy, where one exists, to an employee at risk of redundancy:

from the point an employee has informed us they are pregnant (using the Mat B1 form)
whilst on adoption leave
whilst on shared parental leave

This protection applies until 18 months after the birth or placement of the child for employees returning from maternity, adoption, or shared parental leave.

Employees will not usually need to compete for such a role. We may hold a meeting to decide whether their skills and experience match the essential requirements of the job.

If they match the essential criteria, we will offer the employee the role without a competitive interview. This is regardless of the number of colleagues in the ring-fence for that role.

For the right to the offer of an available vacancy, an employee must comply with provisions to notify their line manager of their intention to return.

The only exception to this right without a competitive recruitment process is when more than one employee is at risk of redundancy whilst on maternity, adoption or shared parental leave. In that case, some form of a competitive application process may be necessary.

Enhancements

Interest in efficiency – we do not normally exercise discretion to award payments under these criteria. Only accrued pension benefits will be released for those meeting minimum pensionable age criteria.

In exceptional circumstances, a business case may be submitted for consideration by the director of resources. The business case must demonstrate savings and benefits to the council.

Redundancy

An enhanced payment of up to 66 weeks is payable for both LGPS members and non-scheme members.

Under the discretionary elements of the LGPS, we have the option to grant additional pension in redundancy or interest of efficiency situations. We do not usually exercise this option, but we will consider it in exceptional circumstances.

View our enhanced redundancy payments.

Voluntary early retirement

Under the LGPS, the earliest age for retirement is 55. There are mechanisms within the scheme that define any applied reductions to drawn benefits before the normal pension age.

Pre-funding

In most cases of redundancy and interests of efficiency, there is a requirement for directorates to pre-fund the pension scheme for the cost of the early release of benefits. The pensions section will provide these costs.

Pension benefits and the LGPS

Section One is in two parts:

Part A is for pensionable employees age 55 or over, having two or more years of pension scheme membership, for the relevant pension scheme regulations
Part B is for pensionable employees under age 55

Section Two shows the additional compensatory payments which are payable whether the employee is a member of the pension scheme or not.

Section One – pension benefits

Part A - Over 55s

The pension regulations provide for the immediate payment of accrued benefits to pensionable employees aged 55 or over. They must have a minimum period of two years' pension scheme membership when employment ends:

by redundancy
in the interests of the efficient discharge of the employer's functions

Local government pension scheme (LGPS)

For each year built up in the scheme to 31 March 2008:

annual pension - this is 1/80th of final pensionable pay for each year of scheme membership. Odd days count as 1/365th of a year
lump sum - this is 3/80ths of final pensionable pay for each year of scheme membership. Odd days count as 1/365th of a year

For each year built up in the scheme from 1 April 2008 to 31 March 2014:

annual pension – this is 1/60th of final pensionable pay for each year of scheme membership. Odd days count as 1/365th of a year
There is no automatic lump sum, but there is an option to give up pension on the basis for each £1 of pension relinquished. We will pay a tax-free lump sum of £12. HM Revenue and Customs limits will apply

In this scenario, the final payment is usually the amount of the retiring employee's full average salary over the last year of service.

For each year built up in the scheme from the 1 April 2014:

annual pension – this is 1/49th of the actual pensionable pay received for the main scheme and 1/98th for the 50/50 scheme. For more details, read the scheme guide
There is no automatic lump sum, but there is an option to give up pension on the basis for each £1 of pension relinquished. We will pay a tax-free lump sum of £12. HM Revenue and Customs limits will apply

Part B - Under 55s

The pension regulations do not provide for the early release of retirement benefits until individuals reach age 55.

We will preserve any retirement benefits accrued under the LGPS until the individual gets to age 55. The preserved benefits are index-linked, in line with the consumer price index. This is from the date of leaving the scheme until the date they became payable.

Other choices may also be available. If an employee wants any further guidance, they can contact the pension section directly.

Section two – Additional compensatory payments

Redundancy

Whether an employee is entitled to receive their pension or not, they are entitled to receive a compensatory lump sum payment for redundancy. This also applies to employees who are not members of the pension scheme.

An employee being made redundant with at least two years' continuous service in local government is entitled to a redundancy payment. This is in line with the Employment Rights Act 1996.

We recognise continuous service with us, and our predecessor authorities, for an employee's continuous periods of employment.

The scale of payment is:

up to age 21 - 0.5 week's pay for each completed year of service
22 to 40 years of age - 1 week's pay for each completed year of service
41+ years of age - 1.5 weeks' pay for each completed year of service

Under the LGPS compensatory regulations, we will enhance the statutory redundancy payment to a maximum of 66 weeks. We will base a week's pay on actual pay, not the statutory amounts.

We will make payments in line with the enhanced redundancy payments ready reckoner. We will embrace any redundancy payment made under the provisions of the Employment Rights Act 1996.

For pension scheme members

The definition of service is 'service qualifying for pension purposes'. It is the reckonable period an employee has been a member of the pension scheme. It includes service brought in from other pension schemes up to and including 31 March 2014.

Changes to the pension scheme on 1 April 2014 mean that there is no longer a pensionable service. LGPS members who join the scheme from April 2014 will not have any pensionable reckonable service.

LGPS members before 31 March 2014 will have their redundancy payment calculated using both pensionable reckonable and continuous service.

If using the continuous service date is more beneficial to the employee, we will use this instead.

LGPS members from 1 April 2014 will have their redundancy payment calculated on continuous service only.

For non-pension scheme members

Service is defined as 'continuous service reckoning backwards from the date of redundancy'. No payment is due for a fraction of a year.

An employee cannot receive a redundancy payment if they accept an offer of employment from any local authority (or other specified body listed on the Redundancy Payments Modification Order) if:

under the notice of redundancy
and, commencing within four weeks of the date of redundancy

If an employee is unsure if this provision applies to them, they should seek advice from HR.

Multiple employments

An employee may have more than one employment contract. If any of these contracts are ended by redundancy, we will assess each contract separately for redundancy payment eligibility.

We will use the continuous service date from the original contract and the start date in the post for additional contracts. However, we will maintain the original date of continuous employment for contractual entitlements such as annual leave, sick pay and maternity leave.

An employee will always need at least two years of continuous employment in any separate contract to qualify.

Teachers' pension scheme members

If teaching staff are made redundant, they will receive a redundancy payment (subject to meeting the qualifying criteria).

Their payment will be as per the enhanced redundancy payments ready reckoner if they are:

under age 55
or, over age 55 and not a member of the teachers' pension scheme

Their payment will be as per the statutory redundancy payments if they are:

aged between 55 and 60, and a member of the teachers' pension scheme

There will be an automatic release of full pension benefits.

Under the pension scheme regulations, there is the option of an award of compensatory added years. This is up to the value of the difference between redundancy entitlements under the enhanced and statutory tables. This figure is converted into an equivalent value of pension made up of both a lump sum and annual pension.

Alternatively, employees can choose to have enhanced redundancy entitlement. This would mean they are not entitled to full pension benefits. An individual can:

take an actuarially reduced benefit (ARB)
defer their pension under the terms of the teachers' pension scheme

Interests of efficiency

We do not normally exercise discretion to award payments under these criteria. Only accrued pension benefits are released for those meeting minimum pensionable age criteria.

Only in exceptional circumstances may a business case be submitted for consideration by the director of resources for corporately employed staff. This includes centrally employed teachers and the director of children's services for schools

The business case must demonstrate savings and benefits to the council.

If approved, the regulations permit boosting of pension benefits to a maximum of £6,755 additional pension each year to a maximum that could have been achieved at normal retirement age.

As this is discretionary, our policy is to award additional pension in exceptional cases only.

Voluntary redundancy process

The voluntary redundancy process applies an objective, fair and non-discriminatory approach to a workforce reduction.

It includes circumstances where there is a fair selection to voluntary redundancy to limit compulsory redundancies.

Managers will define the specific criteria required for the service area. It will release individuals to ensure limited disruption and to deliver future council priorities.

Principles

Our approach to voluntary redundancy selection will be:

objective
fair
non-discriminatory

We will use a clear and consistent approach across all restructures for managers to follow.

Process

Voluntary redundancy can be offered prior to any formal consultation process as a means of reducing the workforce in order to avoid compulsory redundancies.

In some situations management may decide not to invite voluntary redundancy applications. They may restrict it specifically to employees who are in a ring fence situation where there are more people than posts which may result in compulsory redundancies.

Under these circumstances, voluntary redundancy applications could reduce the number of people in the ring-fence or remove it. We will then assimilate employees without the need for a selection interview. It reduces the number of compulsory redundancies.

Managers will decide:

whether to grant voluntary redundancy applications
the timing of this during the organisational change process

Managers will make any employee volunteering for redundancy aware that there is no guarantee they will grant their application.

Our business needs will take priority. If we need specific skills or capability, an individual applying for voluntary redundancy may have that application declined.

Where voluntary redundancy is approved, the manager will agree to an end date with the employee. The employee must continue working until that date.

If we decide to grant voluntary redundancy applications, the consultation document will outline when we invite employees to complete an options form. They will express an interest in voluntary redundancy, and we will advise them of the process to follow.

Even if employees have volunteered for redundancy, the consultation and selection process will continue until management has agreed to accept volunteers.

HR will put together expressions of interest. They will calculate and provide a written redundancy estimate to employees.

Where required, we will give the employee estimates of pension calculations and a separate written response.

If the employee wishes us to consider them for voluntary redundancy, they must complete and return the employee confirmation of request form. We will provide an acknowledgement of receipt.

Managers must assess each application for voluntary redundancy.

We will not consider cost alone as criteria for voluntary redundancy. We will use the following criteria:

how easy is it to replace the employee's specialist knowledge?
would accepting a voluntary redundancy prevent a compulsory redundancy?
the total redundancy cost and, if applicable, the pension cost
in the event of employees being equal, we may use attendance records

The period we consider is the same as a selection interview for the same consultation. We will select the employee with the worst attendance record for voluntary redundancy.

If there are too many applications for voluntary redundancy, where the application of the criteria will not determine decisions, we will not grant requests. All employees will be subject to a selection interview to determine the outcome. It could occur where a large number of applicants have a very similar role.

We will use documented evidence to justify the decision reached for each voluntary redundancy application. This evidence will be based on fact and not opinion. Employees can request to view decision-making records.

At the end of the statutory consultation process, the manager will write to volunteers to approve or decline their voluntary redundancy application.

After an approved application, we will hold a dismissal meeting.

The purpose of a dismissal meeting is to confirm:

the individual employee's voluntary redundancy
that they will be made redundant after the expiry of their notice period

By law, a voluntary redundancy is still a dismissal because of redundancy, even though the agreement is between an employer and employee.

A dismissal conversation must take place to satisfy legal requirements. Where agreed with the individual, this can be issued in writing.

In a voluntary redundancy situation, the employee can request that the conversation is via telephone or in writing.

There is no right to appeal against a voluntary redundancy on the basis that the dismissal is consensual.

Appeals process – application for voluntary redundancy rejected

When we reject an employee's application for voluntary redundancy, the employee can appeal that decision.

The employee must appeal within five working days of being informed of the decision in writing. This right of appeal means that they cannot use a grievance. This replaces that right.

The employee must appeal, in writing, to the manager who informed them of the outcome basing it on the following grounds:

there was a defect in the procedure, and we did not consider the application correctly
we did not assess in line with the procedure
we did not consider all relevant evidence

If the grounds for appeal are not one of the reasons listed above, it is invalid. We will not hear it.

We will invite the employee to attend a meeting to put forward their case with a manager who was not involved with the initial assessment. They will be of at least an equivalent level to the manager who considered the original request. There will also be an HR representative, where possible, at the meeting.

We will also invite the manager who undertook the original assessment to attend, but they may submit their response in writing.

The manager who considers the appeal will inform the employee of the outcome within seven working days of hearing the appeal.

Change of work base

Employees may need to change work base due to:

a change in council property
a reorganisation of work, teams and location

All employees covered by this policy will have a mobility clause in their contracts of employment.

We will discuss any proposed changes to work base with affected employees. A disturbance allowance is payable where the increase in home-to-work mileage is more than ten miles per journey.

We will send affected employees written confirmation, giving reasonable notice of when any changes take effect.

Short-term changes in work base

Sometimes, there is a temporary need to move an employee or team to a different location. We can pay additional mileage incurred using the business travel policy for up to six months.

Disturbance allowance

As compensation for more home-to-work travelling costs, we will pay a disturbance payment. This is where the increase in home-to-work mileage is more than ten miles per journey (20 miles return). We will base the increase in distance of travel on the most direct road route.

Payment for this allowance is for no more than one year. We will pay it in monthly instalments. We base this on the appropriate HMRC approved mileage allowance payment (AMAP) for the extra miles covered.

The calculation is: HMRC AMAP rate x (the journey excess x 2) x 225 working days.

We will apply any disturbance payment pro-rata for part-time and home-working employees. We will take into account the number of days per week that the individual must travel to the work base.

If there is a change to the additional travelling requirement within the twelve months, we will review the situation and payment.

As we make the payments monthly, it will not be necessary to reclaim any if an employee leaves the council.

Multiple planned moves

Changes in work base may be a temporary measure pending a more permanent move.

If the second planned move takes places within one year, the entitlement to the disturbance payment applies for one year from the first move.

Subsequent moves within this period may increase or decrease the journey excess. The manager must inform people services to make the appropriate change to the monthly payment.

Public transport

Where an employee uses public transport to travel to work, we will calculate the disturbance payment as we do for those who drive. We will base the increased travel distance on the most direct road route.

Disability

Disabled employees may incur increased costs due to a change in their work base related to their disability. They may be entitled to claim for those additional costs. If this is the case, the line manager will agree on the disturbance sum.

Travel time

Disturbance payments only cover the additional mileage or public transport cost. Employees cannot claim for additional travel time.

Car parking

A change in work base may result in a difference in the availability of staff car parking. Car parking is not a contractual entitlement. If car parking is not available due to a change in work base, staff cannot submit a grievance on this issue alone.

We will consider the provision of car parking for staff that require it close to their work base due to disability or other appropriate reasons.