Collective Redundancies:
A Guide
What Is Collective Redundancy Consultation?
Collective redundancy consultation is a legal obligation that is triggered when an employer is proposing to dismiss 20 or more employees as redundant at one establishment within a period of 90 days.
What are the legal obligations around collective consultation?
The relevant law is contained in Section 188, Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).
In summary, these are the steps you must take as an employer to consult your employees of where a collective redundancy arises:
- If you are proposing to dismiss 20 or more of your employees at your establishment in a period of 90 days or less, you have a duty to inform and consult the affected employees and their appropriate representatives (representatives of a recognised trade union, directly elected representatives by the employees or a standing body of elected or appointed representatives that are not specifically appointed for the redundancy consultation).
- Alongside the duty of informing and consulting the employees and their representatives, you also have a duty to notify BEIS (the Secretary of State for Business, Energy & Industrial Strategy) of the proposed redundancies.
- Begin the consultation in good time. For redundancies proposed for 100 employees or more, consultation must begin at least 45 days before the first dismissal takes effect. For redundancies of fewer than 100 employees, the minimum period is 30 days. Dismissals cannot take place before the end of this consultation period.
- The consultation process begins with the provision of specific information on the proposed decision to the appropriate representatives. This includes the numbers of proposed redundancies and reasons for them, the method of selecting employees, process for dismissals and calculation of redundancy payments.
- As a minimum, consultation must take place with a view to reaching an agreement on efforts and means of avoiding the dismissals, reducing the number of dismissals, and mitigating their consequences. It is not sufficient for an employer to simply inform representatives of a decision which is already made.
Where there is a recognised trade union, they must be consulted. Otherwise, the employer may consult with representatives elected by the affected employees, or in some circumstance, representatives elected for another purpose. There are specific rules about the election of representatives.
What about individual redundancy consultation?
Employers must still consult with employees who are at risk, in addition to carrying out collective consultation.
What are the risks if I do not comply with the collective consultation obligations?
Failure to inform your employees at the earliest opportunity can lead to claims at an Employment Tribunal, with a protective award of up to 90 days’ actual gross pay for each employee covered by the award. The level of a protective award does not depend on loss of earnings but on the seriousness of the employer’s failure to inform and or consult.
This is one of the most expensive liabilities that an employer may face in employment law, and it is specifically created as such to punish employers for not complying with their obligations.
Other liabilities may include the risk of successful claims for unfair dismissal.
There is also a serious potential criminal offence where the employer, who has a duty to collectively consult their employees, fails to notify BEIS (Department for Business, Energy & Industrial Strategy) of the proposed redundancies.
Where can I go for further guidance and advice?
ACAS has published guidance on collective redundancy consultation http://www.acas.org.uk/index.aspx?articleid=4299
If you need further advice and support, please contact Liz Burley at liz@burleylaw.co.uk.
