Elon Musk’s $44 billion buyout of Twitter from the board of directors was finalised on 27 October 2022. Three senior executives were fired almost immediately; within two weeks, Twitter’s new management had dismissed more than half the social media company’s international workforce.
Having spoken to The Independent about the legal status of the layoffs, and The Guardian following news that Meta will also be reducing its workforce, employment law experts Joseph Lappin and Charlie Thompson discuss the significance of Twitter’s actions, whether there is any precedent for it, and how the situation might play out from here.
Is this kind of mass redundancy normal in the UK, and is it legal?
Charlie: Characteristically, the Musk/Twitter matter is large-scale, dramatic and in the public domain. It is not, however, a million miles away from the experience many employees have when made redundant.
In countless businesses, employees are abruptly being made redundant and having their access to email cut off immediately. This often happens when new ownership comes in, but also in times of economic uncertainty. Redundancy numbers across the economy are bound to increase in the coming months.
Joseph: Most of the affected staff are based in California, where Twitter has its HQ but it looks likely that some UK staff in Birmingham, London and Manchester will be affected. Staff will be asking whether Elon Musk can terminate the employment of half the workforce overnight.
Based on the information available to us at the moment, it looks like the dismissals in the UK will be both substantively and procedurally unfair, giving rise to claims of unfair dismissal.
Does Twitter have a defence for sacking half of its workers?
Joseph: If Twitter can demonstrate that the sudden dismissals are necessary and crucial to the survival of the business, an Employment Tribunal might find that Twitter’s conduct was reasonable. However, although we know that Twitter has been unprofitable, the reasons for the dismissals communicated by the company to staff are vague and look hastily put together. Elon Musk appears to want to increase Twitter’s margins above all else and looks set to go ahead with his plans to shred Twitter’s overheads with little thought for staff or applicable national laws. It would seem therefore that Twitter will be on the hook for a large number of unfair dismissal claims. Given the numbers involved, it looks like Twitter has also failed to comply with its duty to collectively consult with staff in the UK.
What are an employer’s obligations when planning mass redundancies?
Joseph: When an employer proposes to make large-scale redundancies within a period of 90 days, it is under a duty to collectively consult. The employer must consult on its proposal with employee representatives or, if there is one, the recognised trade union. An employer also needs to notify the Dept. for Business, Energy and Industrial Strategy of its plans. There is no sign that Twitter has followed any of these steps prior to announcing the dismissals.
Charlie: Employers in the UK usually need to complete a consultation period before making someone redundant. However, many businesses would rather not do this and instead rush through the process, or not follow one at all. This is likely to infringe the employee’s rights, and so you often end up with the employer offering a settlement package. Many employers would rather just do a deal and settle quickly with the employee than follow all the steps required in a redundancy consultation, only to still be at risk of complaints that the process was pre-determined and unfair.
The key questions for employees at risk of redundancy are – “what are my legal rights, what am I entitled to and should I accept the package on offer or consider suing instead?”
What is the future of Twitter under Elon Musk?
Joseph: We think Twitter will want to settle with staff who are dismissed in the UK by offering them severance packages which might ‘buy out’ their unfair dismissal and related employment claims. However, Elon Musk might find not all staff will agree to any proposed severance terms. The PR fall out looks to be potentially devastating for Twitter. We saw what reputational damage P&O Ferries suffered for doing something similar earlier this year. Staff will want to make the most of the public support they appear to have. The hashtag #oneteam in support of staff finding out that they have lost their jobs was, ironically, trending on Twitter.
What could this mean for other tech giants – including Meta – looking to make layoffs?
Charlie: The Twitter scandal has lowered the bar so far that now it will be easy for Meta and other employers to make their redundancy processes look sophisticated and humane.
Many of these organisations will offer exit packages to redundant employees in exchange for a settlement of potential claims, which can make alleged flaws in the consultation process somewhat academic. But there is still reputational cost to handling job cuts in a cack-handed manner. And if an employer annoys their staff enough, they might prefer suing over settlement.
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