By Brian Palmer, deputy head of the employment unit at Charles Russell
Q Once an employer finds itself needing to make redundancies, what does
it have to do by way of consultation with or notification to its staff?
A There are four main procedural requirements when making somebody
redundant – warning, consultation, fairly applying objective selection criteria
and considering the possibility of alternative employment.
While it is sometimes difficult to warn staff in advance of the prospect of
redundancy, an employer should, where possible, warn employees about the
likelihood of redundancies.
There are two aspects to consultation – with trade unions or employee
representatives and with individual employees.
Where there is a recognised trade union and it is proposed to make 20 or
more staff redundant within a 90-day period, the employer must consult with
that union. If there is no recognised union the employer must consult with
employee representatives.
Generally the employer is required to begin consultation at the earliest
opportunity; however, there are certain minimum periods for consultation to
take place. These are:
– Where an employer proposes to dismiss between 20 and 99 staff from one
establishment within a 90-day period, consultation must begin at least 30 days
before the first dismissal takes effect
– Where an employer proposes to dismiss 100 or more staff from one
establishment within a 90-day period, consultation must begin at least 90 days
before the first dismissal takes effect
– A reasonable period in other cases (two to four weeks is generally
considered reasonable).
An employer also has an obligation to consult with every employee being made
redundant. This includes consulting with employees about the reasons for the
redundancies, the proposed method by which staff are to be selected and the
proposed method of carrying out the dismissals. Employees should also have an
opportunity to query their selection and the possibility of alternative
employment should be fully explored. Failure to consult is likely to render the
redundancy unfair.
Q Can I choose the best staff to be retained in order to give the company
the best chance of survival?
A If a redundancy dismissal is procedurally unfair, an employee could
be entitled to unfair dismissal compensation as well as statutory redundancy
pay.
If there is a customary arrangement or an agreed procedure for selection,
that must be followed. If not, selection criteria will need to be identified
and developed where there is a need to select between those employees who are
to be dismissed for redundancy and those who are to be retained.
The selection criteria that are normally adopted are as follows:
– Volunteers
– Appraisal grading
– Disciplinary record
– Attendance record
– Length of service (LIFO)
– Relevant qualifications and experience.
No employee may be selected for redundancy for any of the following reasons
(which must not feature in any selection process):
– Union-related reasons
– Health and safety-related reasons
– For asserting a statutory right
– Maternity-related reasons
– For carrying out the function of standing as an employee representative
– Sex, race or disability.
Q Where we are having to make redundancies it stands to reason that there
is no alternative employment. Do we have to consider that?
A The employer must ascertain whether it can offer alternative
employment to anyone likely to be made redundant.
Anyone who unreasonably refuses an offer of suitable alternative employment
may lose the right to receive a redundancy payment. There are certain technical
conditions that must be complied with for this situation to apply.
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If an offer of alternative employment is made by the employer, both the
employee and the employer have a four-week trial period in which to decide if
the offer of alternative employment is mutually acceptable.
All staff given notice of a redundancy are allowed reasonable time off to
look for alternative employment.
