Summary
Our employment experts Ian Pace and Rebecca Cairney discuss the recent issues at Twitter as Grant Schapps, Business Secretary, writes to remind them to comply with UK law. We take a look at what the UK Law says, what the concerns are and what is next for Twitter.
Transcript
Ian Pace: Hi there. Welcome to Law Behind the Headlines. My name is Ian Pace. I'm a Partner in the employment team based in Manchester. I'm joined by my North West colleague, Rebecca Cairney, who's a Principal Associate based in our Liverpool office. Hi there, Rebecca.
Rebecca Cairney: Hi, Ian.
Ian: Today, as you'll have seen in the headlines, we're going to be talking about the takeover of Twitter by Elon Musk. Now, that took place fairly recently in October this year, and it was reported to be worth in the region of £39 billion. Within days, reportedly, Twitter announced thousands of job cuts worldwide and reportedly 3,700 people have already been dismissed.
Ian: Twitter's already facing legal action in the US over the speed of dismissals and the manner in which they were implemented, which reportedly includes locking people out of the systems before they even knew they were facing losing their job.
Ian: It's also reported that Musk has sent an email to staff saying that all communications should take place via email. Hundreds of UK-based staff expect to be impacted. Many have already apparently been locked out of their systems. Grant Shapps, the Business Secretary, has already written to Twitter to remind them of their UK obligations under UK employment law. So that begs the question, what is the law in this area in the UK, Rebecca?
Rebecca: Yeah, thanks, Ian. The law in this area is extremely complex. Essentially, if there's 20 or more redundancies that are likely to occur in a 90-day period or less at one establishment, then this means that the collective consultation requirements will come into force.
Rebecca: Now, if that occurs, there is an obligation to notify the Secretary of State in writing of those proposals. And there's a very specific way of doing this. There's very specific rules in place as to how that should be done, what information needs to be provided, etc.
Rebecca: There's also a duty to inform and consult appropriate representatives of the impacted employees. So this can be a trade union, or where there is no trade union, it can be elected representatives. Now, where representatives need to be elected, there are specific rules about the election process. So, for example, the employer needs to make the arrangements and ensure that it is fair. They need to sort out the voting arrangements, etc. and any breach of that obligation can in itself give rise to a protective award.
Rebecca: There's minimum periods for consultation, so that can be between 30 and 45 days, depending on the amount of people who are impacted. But it's important to note that those are minimum requirements. And actually the general rule is that consultation needs to take place in good time.
Rebecca: There's also rules about the provision of information to affected employees. So, again, very, very specific rules about what information the employer needs to provide to the representatives and in what format. The consultation needs to be undertaken with a view to reaching agreement on ways to avoid the dismissals or reduce the dismissals or to mitigate their consequences. So essentially it needs to be a genuine consultation rather than just a tick-box exercise.
Rebecca: And finally, employers must also consult individually with potentially redundant employees. And so there's an awful lot to consider, and there is a lot that can go wrong.
Ian: Yeah, it sounds like potentially quite high liability from what you're saying as well. If we don't follow these collective consultation obligations, then there is that potential risk of a protective award. So obviously, what is the protective award, Rebecca?
Rebecca: So it's 90 days up to 90 days pay per employee. Now, obviously, that can soon add up, especially when there's hundreds of employees involved.
Ian: Well, that's good to know. And aside from the collective consultation obligations, we've also heard some stories coming from out of the US that Musk has told Twitter's remaining employees, that they should be expecting to work really long hours at high intensity. And one of the phrases that's been bandied about is they should expect to go hardcore, at least for the next three months. What is the relevant law regarding working hours in the UK?
Rebecca: Yeah so working hours are regulated through the Working Time Regulations and that implements the European Working Time Directive. So working hours are capped at 48 hours per week. If employees are required to work hours that exceed that 48 hours per week, then employers in the UK are required to obtain a worker's agreement in writing that documents that consent and it's usually seen in the form of an opt-out agreement.
Rebecca: Now, even if a worker has agreed to opt out of the 48 hour week cap under the Working Time Regulations, they are still entitled to adequate rest periods during the normal working day and, save for a few exceptions, remain entitled to compensatory rest.
Rebecca: Now claims can arise in the employment tribunal where the excessive hours are worked over a 17 week reference period. There's also the potential risk of stress at work claims which can be brought in the civil courts.
Ian: OK, so even those workers that do remain with Twitter if they are expected to really go hardcore and that may if that does apply in the UK, then there could be issues under the Working Time Regs as well. Going back to the potential risk of dismissals in the UK, as I understand it, Musk has basically written to those employees that he's decided he doesn't want at Twitter US and is giving them the option to leave with three months severance pay and leave straight away. Is that something that he can do in the UK or are employees entitled to more notice than that?
Rebecca: Well, employees in the UK are guaranteed minimum periods of notice, and that's under Section 86 of the Employment Rights Act or the ERA. So this means that employees who have worked for an employer for longer than one month are entitled to a week's notice for each completed year of continuous employment up to a maximum of 12 weeks.
Rebecca: So depending on their length of service, essentially, they could be entitled to more notice than Musk is reportedly offering.
Ian: That's obviously only under statute. It really depends what's under the contract as well. And clearly, it's up to the contract to award for additional notice over and above that as well. So that's something else I suppose they would need to look at. What in summary then, would you say are the main concerns that what's going on with Twitter the moment?
Rebecca: Yeah, well, as you mentioned earlier, Ian, employees in the UK have also reportedly been already locked out of systems, which is echoing what seems to have happened in the US. Now this approach calls into question whether decisions have already been made, so whether any consultation that does take place now might just be a smoke screen or questions as to whether it can still be shown to be a genuine consultation.
Rebecca: There's also going to be questions as to whether this had whether there's been enough time to appoint representatives, because there's not been any mention of this in any of the reports that we've seen. And in terms of the process that's been followed so far, it sounds like there's been very little. So obviously a good few concerns from a process perspective.
Rebecca: As we've talked about, there's this report that's apparently gone to employees expecting them to work the long hours at high intensity and the risk of potentially breaching the Working Time Regulations. But on top of all of that, there's also the potential for unfair dismissal claims, the rights to notice pay, rights to holiday pay. And this is all in the run up to Christmas in the middle of a cost of living crisis. And what is also set to be a winter of discontent. So I think it's no wonder that Twitter employees are worried about this at the moment.
Ian: Yeah, absolutely. So what do you think is next on the cards?
Rebecca: Well, the Department for Business has said that they are keeping a close eye on the evolving situation at Twitter. And as you mentioned, the Business Secretary has written to the Managing Director of Twitter to remind them of their statutory obligations in the UK.
Rebecca: If the UK business decides not to comply with its duty to collectively consult, then they could be liable for up to 90 days gross pay for each affected employee. And as we discussed earlier, if there are hundreds of people potentially impacted by this, then this soon adds up. And this is in addition to any potential awards for unfair dismissal.
Rebecca: It's probably also worth noting that the 90 days' pay is actually intended to punish the employer for not complying with legal obligations.
Rebecca: And finally, there's potentially a criminal offense involved if the Department for Business is not informed of those proposals. So there's some quite high stakes here, Ian.
Ian: Yeah, absolutely. And this is an international company, obviously. This isn't a company that's just based in the US and the UK. This is across the world now and there's employees based obviously in the EU. Have they had anything to say about this at all?
Rebecca: Yeah, absolutely. There was a nice quote, I think, that came out that said, the EU have warned Musk that this bird must fly by our rules. So a warning to Musk that he needs to abide by EU law for any employees, obviously based in the EU.
Ian: Yeah and what Twitter employees been saying about their experiences, so far?
Rebecca: We have seen a lot on Twitter where employees have been tweeting about their own experiences across the world. You know, not only is this having a huge impact on the affected employees, but it does also have the potential to cause reputational damage for Twitter if it's seen to be treating its employees in this way.
Ian: Yeah, absolutely. So there's not only the financial risk of what the proposals are, but obviously this is already before these steps are implemented, having that massive reputational damage on the business. It's definitely want to keep an eye on, isn't it? And I think we'll see more of this as the months go on. But clearly, Musk is out there to reform Twitter in the way that he considers to be appropriate. So it's definitely one we need to be keeping an eye on, and it's one that I think we should be discussing more in our separate employment law podcast. That's our Employment Insights Podcast, which we'll be following up very shortly.
Ian: But Thanks again for your time today, Rebecca. Really appreciate it. Hopefully you've all found that to be useful insight into the headlines. And if you do have any queries on it or those obligations that we've been discussing, then please do feel free to contact either Rebecca or myself directly. Thanks for your time.
Rebecca: Thanks, Ian.