Redundancy consultation process

Here we look at how employers should conduct the consultation process when dealing with redundancies.

When is consultation required?

There are three situations where collective consultation is required:

• If between 20 and 99 employees are to be made redundant in one establishment within a 90-day period, the employer must consult with the representatives of affected employees at least 30 days before a decision to dismiss takes place.
  
• If 100 or more employees are to be made redundant, the employer must consult with representatives at least 90 days before a decision to dismiss takes place.
  
• An employer that has 50 or more employees in one establishment must adhere to the provisions of the Information and Consultation of Employees Regulations 2004. Under the fallback provisions, the employer must consult employee representatives where there is a threat to employment in the establishment, for example a potential redundancy situation, and on decisions likely to lead to substantial changes in work organisation, including redundancies. However, this requirement will not arise where the employer has informed representatives that it will be complying with its duty to consult collectively under redundancy legislation.

There is no requirement to consult representatives when making fewer than 20 employees redundant. However, each employee has a right to be consulted individually about redundancy proposals. The duty to consult employees individually applies even where the employer is required to consult collectively.

Consultation should begin as soon as reasonably practicable and should be concluded before the final decision to dismiss those identified for redundancy is made. The aim is to give employees as much advance warning as possible to allow them to assess their position and, if necessary, look for alternative employment.

What should consultation be about?

Once it becomes clear that redundancies may be necessary, the consultation process begins and the employer must consult on ways of avoiding dismissals, reducing the number of employees to be dismissed, and mitigating the consequences of dismissals. Options the employer should consider include:

• reducing overtime;
  
• altering shift patterns;
  
• lay-off and short-time working;
  
• alternative employment; and
  
• volunteers for redundancy.

Should redundancies appear inevitable, the employer should consult representatives about the pool for selection, the selection criteria that will be applied and the method of application, such as competitive interviews. Selection criteria should, as far as possible, be objective. Once this is completed, the process of selection can go ahead.

The selection criteria should be applied to the pool of employees in the manner agreed. If no agreement can be reached, it will be for the employer to decide on a fair and reasonable approach for the criteria to be used.

Further information

• The law relating to redundancy is contained in the Employment Rights Act 1996  and the Trade Union and Labour Relations (Consolidation) Act 1992.
  
• Employers can also access the Information and Consultation of Employees Regulations 2004

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Marc Jones is a partner at Turbervilles