Former city council director awarded £10k statutory redundancy payment after claiming restructure constituted demotion

The decision reportedly has the potential to open the door to further pension entitlements for the former Corporate Director of Place, Neil Ferris, worth around £350,000, according to the Local Democracy Reporting Service (LDRS).

Ferris’s claim centred around the council’s corporate restructure, which involved plans to replace his position with two corporate director positions.

He sought voluntary redundancy in light of the plans, claiming that the alternative role offered to him would constitute a demotion and damage his career.  

In his original position, he had ultimate responsibility for 775 staff, a revenue budget in the region of £70m per year and a capital budget of around £400m.

The post also “had a very substantial” number of legal delegations consistent with the wide remit of the role and authority to approve virements up to £500,000, according to the tribunal.

In January 2024, he told the council’s chief executive, Ian Floyd, that he would like to take compulsory redundancy, and claimed that the restructuring process "felt deliberately personal".

In a consultation response to the proposed structural changes, Ferris also alleged the changes were designed "to create a fig leaf of a redundancy mitigation whilst ruining my future career prospects and removing any operational independence or responsibilities that I have undertaken for over 10 years".

The council's Staffing Matters and Urgency Committee (SMUC) eventually approved the new structure in March 2024, which included the deletion of the claimant’s Corporate Director of Place role and the two previous direct reports (Director of Economy, Regeneration and Housing and Director of Environment, Transport and Planning).

These positions were replaced with the following roles: Director of Transport and Environment, Director of City Development and Director of Housing and Community Services.

Ferris continued to seek redundancy, despite the council suggesting that he could take on one of the replacement positions.  

He was dismissed by reason of redundancy with effect from August 2024 and denied statutory redundancy payment because he “unreasonably refused” an offer of suitable alternative employment before the end of his employment.

The tribunal ultimately concluded that the replacement for Ferris's previous position "was not a suitable alternative" as it had been evaluated by the council as of a lower grade than his initial role, and that it carried a 10% pay cut.

His original job also had a wider remit than the replacement, and there was a "substantial difference" in the size of the budget and number of staff that both roles had responsibility for, the tribunal said.

"Although we do not know if there was a plan or conspiracy to get the claimant out of his job, we conclude that the elected members will have known very well that the claimant’s new job as Director of City Development, were he to take it, would be substantially reduced in terms of pay, scope and status," it added.

The tribunal also noted that Ferris would be on the management team as a peer with his former director reports, under the new arrangements.

It said: "He would no longer have responsibility for the functions and areas that the other two Directors (at least one of whom would be his former direct report) would now have. This in our view represented a clear reduction in status, and in fact amounted to a demotion in any sense of the word, despite Mr Floyd’s assertion that it was not a demotion."

In addition, the panel said that members and other senior officers would have been aware that the proposed role was a "demotion" - and that "any reasonable person" would consider that the claimant's role in the organisation and amongst their peers at the respondent had diminished.

It concluded that there were no circumstances in which it was unreasonable for the claimant to have rejected the offer, and that he was entitled to a statutory redundancy payment of £10,500.

The City of York Council is now considering an appeal, according to the LDRS.

A spokesperson for the council said it could not make any comment on the decision as the “legal process is ongoing”.

Adam Carey