Where an employer proposes to make 20 or more employees redundant in a period of 90 days or less at one establishment, additional measures must be complied with. Employers will need to factor in these additional requirements early, as strict timescales apply within which the employer must collectively consult in relation to the proposed redundancies.
Who do we have to consult with?
The employer must inform and consult with the appropriate representatives of the affected employees in relation to the proposed redundancies. “Affected employees” includes anyone who is affected by the redundancies, including those who might remain employed but be affected by any changes put in place.
Therefore, the first stage is to identify the affected employees and then appoint representatives. Where a trade union is recognised, the consultation must take place with the union. Otherwise, the employer must consult with representatives directly elected by the employees, or a body of representatives.
What do we have to consult about?
Representatives must be provided with certain specified information relating to the proposals and then consultation is carried out with a view to reaching agreement on avoiding (or reducing the number of) redundancies and mitigating their impact.
Employers should consult about whether all of the redundancies are required (exploring the business reasons for the redundancies), the level of redundancy payments that would be made, other efforts to assist employees such as redeployment or other assistance and the selection criteria to be adopted.
This is a two-way process and employers need to approach it with an open mind and follow up on any suggestions made, in the same way that they would during individual consultation. If the proposals change as the process is ongoing then the changes should form part of the consultation too.
When do we need to begin collective consultation?
Consultation must begin in good time. There are minimum time periods which apply depending on the scale of the redundancies proposed. Those time periods run from the start of consultation to the first redundancy taking effect.
Where 100 or more redundancies are proposed, consultation must begin at least 45 days before the first redundancy takes effect. For between 20 and 99 redundancies that period is reduced to 30 days.
There may be special circumstances where it is not reasonably practicable to consult in good time or otherwise comply with all of the requirements; however, the exceptions are limited and will depend on the circumstances of the particular case.
It is worth noting that the above periods are not minimum consultation periods, just that the redundancies cannot take effect until those time limits have expired. Consultation takes as long as it takes – employers could reach agreement very quickly and wait for the periods to elapse before dismissing. Alternatively but less common, consultation could be lengthy and protracted and the period longer.
Notify the Secretary of State
Where collective consultation applies, employers are also required to notify the Secretary of State using a form HR1. Notification must be provided within certain timeframes depending on the amount of redundancies being proposed. Failure to do this is a criminal offence.
Top tips for collective consultation
At an early stage, employers need to think about how many redundancies are being proposed, who will be affected and also who could be appointed as representatives if there is no trade union recognised. Deciding what is an ‘establishment’ for the purpose of numbers is complex. The HR1 form simply refers to this as each ‘site’ but that is an oversimplification. Advice should be taken if employers are in any doubt.
Of course, careful planning will be needed in relation to e.g. selection pools, criteria and redundancy terms. A timetable for implementing the redundancy programme should be outlined early, particularly in view of the strict deadlines.
The required information to be given to representatives should be prepared at an early stage and as well as this, employers will also need to prepare an overall communication strategy with employees. This should include employees who are not in the workplace for whatever reason such as sick leave, furlough or family related leave.
Overall communication is key, and it is important to also communicate with employees individually rather than just their representatives. As set out above, these obligations are in addition to what employers have to do in all redundancy situations, which we will be reporting on in the coming weeks.
If employers do not comply with the duties under collective consultation, then the employment tribunal can award up to 90 days’ gross pay for each employee dismissed as redundant and therefore it is important that employers are well prepared should these provisions apply.
If you require any assistance in relation to collective consultation, redundancies or any employment or HR matters generally please do not hesitate to contact Joanne Holborn, Tom Scaife or Caroline Rayner on 01228 552600 or 01524 548494.
This alert does not provide a full statement of the law and readers are advised to take legal advice before taking any action based on the information contained herein.