Redundancy after Lockdown – the importance of Consultation

In this week’s installment we look at the importance of individual consultation with employees in a redundancy situation, which is fundamental to the fairness of any redundancy exercise. We have already reported on collective consultation here. Individual consultation is different and separate to those obligations. We will look at what employers are required to do in order to get it right. We will also take a look at the updated ACAS Guidance on Redundancy.

The importance of consultation in a redundancy exercise cannot be underestimated. It is one of the main components that the Employment Tribunal will look at in deciding whether an employer has acted reasonably (and in turn, fairly) in dismissing an employee or employees for redundancy.

We have previously reported on collective consultation which is also a key element in assessing the fairness of dismissals in certain circumstances. Collective consultation does not eliminate the need to consult with individual employees, but individual consultation will always be required whatever the number of employees at risk of redundancy.

Employers must be able to show that it had an open mind when going into individual consultation and still capable of being influenced about the matters being consulted about. Therefore, consultation should be commenced at an early stage in any redundancy process rather than when a decision to dismiss has already been made. Consultation is supposed to be a two-way process, with adequate information being provided to employees, employees being given time to respond to the information and proper consideration of any response or suggestions made by employees such as ways to avoid redundancies. Employers should properly follow up on any such suggestions and keep a note of having done so rather than treating it as a tick box exercise.

Each case will depend on its own facts and there is no prescriptive procedure set out in the legislation as to exactly how consultation should take place or what should be discussed. However, it will normally include an opportunity for the employee to comment on the basis for selection, in terms of the pool and selection criteria (see our earlier alert on Selection), an opportunity for the employee to suggest ways to avoid their redundancy, discussion of any alternative employment positions within the business or across the group and also to discuss any other matters or concerns that the employee may have.

Equally there are no prescribed timescales in which consultation should take place and the employer must be satisfied that consultation has taken enough time in order for it to be meaningful. It is also best if the consultation process starts at a formative stage rather than later on in the process when the employer is less likely to change its mind.

It is good practice for employers to offer employees an opportunity to be accompanied at consultation meetings by either a colleague or a trade union representative, although this isn’t a strict requirement unless an employer has a contractual redundancy procedure which expresses it as a right.

Usually (but not always) employers should look to hold two consultation meetings with the employees who have been provisionally selected for redundancy. This will include between the two meetings following up on any suggestions that have been made by the employees and then discussing the follow ups at the second meeting before redundancy is confirmed.

If the employee in question is a unique post holder and therefore in a pool of one, then they will not have been scored but they will still need to be consulted with in terms of ways to avoid their redundancy and whether they agree with being a unique post holder. Where employees are in a pool and are scored, the employer should disclose individual scores to the employees explaining how their scores were arrived at and give the employees a chance to challenge their individual markings as part of the individual consultation. However, they should not be provided with other employees’ scores. Employees may wish to consult over the pool or their scores so that there is a paper trail throughout the process in order that the employer can show that it has properly applied its mind to any decisions that it has taken in that regard should it be called into question at a later date.

Updated ACAS Guidance on Redundancy

ACAS has updated its guidance on managing staff redundancies here. This is guidance, it is not statutory. It covers areas such as making a redundancy plan, working out redundancy pay, supporting your staff and planning for the future.

If you require any assistance in relation to consultation, the redundancy process in general or any employment or HR matters 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.

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