Heathrow launches voluntary severance scheme to staff on more generous earlier contracts – and can’t rule out further job cuts
Heathrow has about 7,000 directly employed staff, and has experienced a reduction in flights of around 97% due to Covid. It has It has already cut a third of its managerial roles – people on relatively high pay. It is now trying to encourage staff who were employed before 2014 to offer to take voluntary severance (which is different to redundancy). Any payments over £30,000 are subject to tax. If someone is redunded, that post cannot be legally filled for several months. With severance, the job can then be refilled. Heathrow is trying to get rid of those on more generous contracts, with better terms and conditions, and employ staff on worse contracts. That is what British Airways has done, to the fury of the unions. The Unite union is a staunch supporter of Heathrow, and seems to have agreed to go along with Heathrow’s severance offers. It is likely there will also be many redundancies, as air travel demand is unlikely to pick up to earlier levels for several years. A total of 76,000 people are employed across 400 different companies at Heathrow. About 25,000 of those jobs might be at risk.
Heathrow Airport launches voluntary redundancy scheme – and can’t rule out further job cuts
The company, which has around 7,000 directly employed staff, said it had agreed the scheme with unions as it battles to recover from the coronavirus crisis.
It has already cut a third of its managerial roles.
John Holland-Kaye said:
Throughout this crisis we have tried to protect frontline jobs but this is no longer sustainable, and we have now agreed a voluntary severance scheme with our union partners.
While we cannot rule out further job reductions, we will continue to explore options to minimise the number of job losses.
British Airways, which operates the most flights to and from the airport, has previously announced a plan to cut up to 12,000 jobs.
A total of 76,000 people are employed across 400 different companies at Heathrow.
Mr Holland-Kaye told the City AM podcast last week that cuts being made by airlines mean around 25,000 of these jobs could be at risk.
Just 228,000 passengers travelled through the airport in May, down 97% on the same month last year.
Airlines have grounded the majority of their aircraft because of the collapse in demand and travel restrictions due to the coronavirus pandemic.
Year-on-year demand across the first five months of 2020 is now down 44%.
Heathrow said in a statement that the “grim picture is set to continue” as the 14-day quarantine policy came into force on Monday.
It is urging the Government to establish air bridges between the UK and countries where the risk of being infected by coronavirus is deemed to be low, so passengers can avoid having to self-isolate.
This will enable the UK to “restart its economy in earnest, protecting livelihoods in aviation and the sectors that rely on it”, according to the airport.
The document sent round to Heathrow staff on Voluntary Severance says:
Are VS payments tax free up to £30,000?
This payment will be free of income tax and national insurance contributions up to the value of £30,000, thereafter the payment is subject to income tax deductions as defined by the HMRC regulations at the time of payment, but no national insurance will be deducted from the VS payment.
If I take VS now, will I be able to apply for a role at Heathrow once the current situation changes and external recruitment starts again.
Colleagues leaving the business via this voluntary severance scheme will be restricted from being re-employed by Heathrow for a period of 2 years. This protects the tax-free element of the severance payment and also ensures consistency
Heathrow launches voluntary redundancy programme
By Callum Jones, Trade Correspondent (The Times)
Friday June 12 2020,
The number of passengers using Heathrow last month was down 97 per cent on the year before.
Heathrow airport is seeking voluntary redundancies as it braces for a prolonged decline in passenger traffic after a 97% drop in May.
John Holland-Kaye, chief executive, said efforts to protect jobs are “no longer sustainable” as restrictions continue to paralyse what was Europe’s busiest airport before the lockdown.
He warned that the company, which directly employs about 7,000 staff, could not rule out further job losses after agreeing the voluntary programme with trade union leaders.
Travel restrictions have sent Heathrow’s passenger levels to record lows.
“Throughout this crisis we have tried to protect frontline jobs but this is no longer sustainable and we have now agreed a voluntary severance scheme with our union partners,” Mr Holland-Kaye, 55, said.
“While we cannot rule out further job reductions, we will continue to explore options to minimise the number of job losses.”
Only 228,000 passengers used the airport in May, down 97 per cent on the same month last year. Monday’s introduction of a requirement for arrivals to isolate themselves for a fortnight is expected to continue to suppress travel.
Heathrow has called for air bridges to be established with countries where the prevalence of coronavirus is low, allowing passengers to avoid being quarantined.
Of the 76,000 staff employed by some 400 companies at the airport, Mr Holland-Kaye has previously estimated that about 25,000 are under threat. British Airways, which runs more flights in and out of Heathrow than any other airline, has already announced plans to cut as many as 12,000 jobs.
The trade union Unite called on the Treasury to provide the aviation industry with a “bespoke financial support package”. Oliver Richardson, its national officer for aviation, said the government must “get a grip of the challenges the industry faces”.
Some information about voluntary severance
If you are dismissed due to redundancy, you are entitled to be paid for the full amount of your notice, as well as any redundancy payment you qualify for.
So if you accept an offer of voluntary severance which involves you being required to leave immediately, you should make sure your employer agrees to pay you a sum equal to your notice pay, on top of your severance payment, so that you don’t lose out.
‘Severance’ is not a legal word, but employers usually give it the same meaning as ‘redundancy’.
In addition, you must be paid for any holiday that you have earned but not taken by your leaving date.
Tax and national insurance must be deducted from all notice pay and payments in lieu of notice.