Honda confirms Swindon car plant closure with the loss of around 3,500 jobs

Honda announced that it will close its Swindon car factory in 2022 with the factory’s entire workforce of around 3,500 employees destined to lose their jobs through redundancy.

While Honda has not yet confirmed exactly when the redundancies will be made, North Swindon MP Justin Tomlinson said on Twitter that he had spoken to the manufacturer and that “Honda will be consulting with all staff and there is not expected to be any job losses, or changes in production until 2021.”

Employees therefore potentially face years of uncertainty with Honda only legally required to notify trade unions and employee representatives a minimum of 90 days before the redundancies are due to be made. Whether employees will receive any kind of enhanced redundancy packages is another matter.

What does the Honda factory closure mean for UK car manufacturing jobs?

Honda, which currently builds 160,000 of its Civic hatchbacks a year in Swindon, said the move was due to changes in the global car industry and the need to launch electric vehicles, claiming the decision was unrelated to Brexit.

The plant opened in 1985 and is Honda’s only car factory in the EU, but has operated at less than full capacity in recent years following a slump in demand from Europe. A production line with a capacity of 100,000 units was suspended in 2014.

The news comes at a time of increasing uncertainty in the UK car industry. Earlier this month, Nissan announced plans to move production of its X-Trail SUV to Japan after previously saying the new model would be built in the UK, while Jaguar Land Rover reported a £3.4bn loss in the final three months of 2018 and plans to cut 4,500 jobs, blaming falling demand from China. Ford has also announced plans to cut thousands of jobs across Europe, including in the UK.

Meanwhile, The Society of Motor Manufacturers and Traders (SMMT), which represents more than 800 automotive companies in the UK, has warned that a ‘No Deal’ Brexit would risk “destroying the automotive industry and the hundreds of thousands of jobs it supports”.

The growing threat to the UK car industry means those workers made redundant may struggle to find new employment within the industry and may need to consider options such as retraining, moving abroad, accepting less skilled work or taking early retirement. It is therefore vital for these workers to secure the very best redundancy packages possible to support them and their families during this difficult time.

How can workers get the best possible redundancy package?

Any employee working for a company under a contract of employment and with at least 2 years of continuous employment will be entitled to a ‘statutory redundancy payment’ if they are made redundant. The exact value of a statutory redundancy payment will depend on the number of years’ service an employee has and their age during their employment, with the maximum payment currently capped at £15,240.

However, some employees are offered enhanced redundancy payments in excess of a statutory redundancy payment on the condition that they enter into a ‘settlement agreement‘. This is a legally binding document an employee may be asked to sign where they agree not to bring a claim in an employment tribunal and the employer will offer financial compensation, usually in the form of a one-off payment.

The employer will make a contribution to the employees’ legal costs in taking advice about any settlement agreement they are offered. This is because the employee must receive independent legal advice before signing a settlement agreement otherwise it will not be legally binding.

When making large numbers of workers redundant, employers will typically use a ‘template settlement agreement’ where all employees will be asked to sign a similar agreement on specified days. This may take place on a single day, with all employees being called in and given access to independent legal advisors or it might take place over several days, depending on the number of workers and other factors.

An important point to understand is that employees do not have to use the legal advisor suggested by their employer. They can choose your own legal representative to review any settlement agreement offered to them, which can provide piece of mind that the advice received is truly independent.

Contact IBB’s employment law experts today

If you are a Honda employee facing redundancy as a result of the Swindon plant closure, please contact our specialist employment lawyers for clear, practical advice on the next steps you need to take by emailing employment@ibb.law.co.uk.