Legal Q & A Collective redundancies

By Sarah Howlett, senior solicitor at Klegal People Services

Q We are thinking of making some large-scale redundancies, what sort of
consultation obligations apply? Do we still need to consult if we can reduce
numbers through volunteers?

A If you are planning on making 20 or more employees redundant within
90 days, it is likely you will need to collectively consult. This must be
factored into any redundancy plans as you need to consult at least 30 days
before making any redundancies.

If you decide to reduce the headcount by more than 100, then 90 days
consultation is required. However, asking for volunteers will not accelerate
this process. You are still required by law to collectively consult even if you
can achieve the full headcount reduction by volunteers.

Q Are there any instances when collective consultation will not apply?

A Yes. Collective consultation only applies if the staff being made
redundant are all from the same establishment. Deciding what an establishment
is can be difficult as there are no set rules. It could be a branch office, a
business unit or various building sites run out of one base. Look carefully at
the employees’ location, what they do and to whom they report, to decide
whether they are all part of the same establishment.

Collective consultation also only applies if the redundant staff are
employed by the same employer. Even if two subsidiary companies of the same
parent appear to be one establishment, each company must propose to make more
than 20 redundancies for the collective consultation obligation to kick in.

An employer may be able to avoid collective consultation by making staff
redundant in batches of less than 20. However, tribunals do not look favourably
upon employers who deliberately try to avoid collective consultation by slicing
redundancies up.

Q Collective consultation seems quite time consuming and costly. Is there
a way to reduce the cost?

A An employer does not need to wait until the end of the consultation
period before giving an employee notice of dismissal. It is more cost effective
to start the consultation and give the employee their dismissal notice after a
week or so. Consultation can then take place during the notice period. If the
consultation determines that an employee will not be made redundant after all,
then the notice can be retracted.

Q Who should I consult with and what about?

A If you have a recognised trade union, you should simply consult
with its representatives. This means consultation can begin straight away. If
your firm does not have a trade union, you may have some other form of employee
consultation forum you could consult with.

To decide whether the employee consultation forum is suitable, you should
look carefully at the reason why it was set up and whether it properly
represents the staff who are likely to be made redundant. If none of these
options are appropriate, you should elect staff representatives.

In some circumstances, the group of employees to be made redundant is only
partially represented by a trade union. As a result, consultation must take
place with both trade union and employee representatives.

Consultation with the representatives should be held with a view to reaching
an agreement, but it is not necessary that agreement is actually reached. Consultation
should cover such matters as whether the redundancies can be avoided, whether
the number of redundancies can be reduced, the selection procedure to be
adopted and how much compensation the employees will receive.

Once collective consultation has been completed, you should consult with
each employee individually before their dismissal.

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