We are embarking on a 90-day collective redundancy programme, but I am unsure of when we are able to give notice of dismissal. If we do this prior to the end of the 90 days, are we at risk?
Consultation should begin as soon as possible and must be completed before any redundancy notices are issued. In particular:
- where you propose to make 100 or more employees redundant at one establishment within a 90-day period, consultation must take place at least 90 days before the first of the dismissals takes effect, and
- in any other event, consultation must begin at least 30 days before the first of the dismissals takes place.
Some employers do choose to give notice prior to completion of collective consultation, often for financial reasons. The decision in Junk v Kuhnel has made this practice more problematic. In Junk, the European Court of Justice (ECJ) decided that ‘redundancy’ means the act of giving notice to terminate a contract of employment, and not the date on which the employment actually ends. Strictly speaking, an employer should not issue a notice of redundancy until it has first completed the relevant period of consultation.
Alternatively, you may give notice to terminate once the actual consultation process is complete. This means that, once a full process of genuine consultation has been completed with employee representatives, notice could be given to the individuals selected before the 90 days is up. Notice should not expire before the end of the 90-day protected period, but can run concurrently.
This is not without some risk. A failure to comply with the obligation to consult can result in a tribunal making a protective award of up to 90 days’ pay to each affected employee.
When dismissing an employee by reason of redundancy, do we still need to follow the statutory dismissal and disciplinary procedures (DDPs)?
Yes, the DDPs apply to redundancy dismissals as well as dismissals for reasons such as misconduct and poor performance. Where an employer fails to follow these procedures, any dismissal will be automatically unfair and will increase the employer’s liability in respect of any compensatory award. The statutory DDPs require a three-step procedure:
(i) Invite the employee to a meeting in writing
(ii) Have a meeting with the employee to discuss the selection criteria and the employee’s score. After the meeting, the employer must inform the employee of its decision, and
(iii) The employee’s right of appeal.
One important point to remember, however, is that where an employer is making 20 or more people redundant, it is under a statutory duty to collectively consult with those employees. There is no requirement in these circumstances to follow the statutory DDPs.
Can we select a woman who is on maternity leave for redundancy?
Pregnancy/maternity leave does not prevent you from selecting a woman as a candidate for redundancy, as long as you tread carefully when doing so. Selection must not be for any reason connected with her pregnancy or maternity leave, as this would be automatically unfair. Employers should also be aware that a woman on maternity leave has a right to be offered any suitable alternative position in preference to any other employee who is similarly affected by the redundancy. This obviously puts the woman in a far more advantageous position than a man who is absent on health grounds or a woman who is not on maternity leave.
We have provisionally selected an employee for redundancy and he has asked to see his scores and the scores given to his colleagues. Do we have to disclose them?
You should show the employee the selection criteria you used and his own individual score so that the employee is clear as to how he has been selected and how his own individual score has been reached. However, the employee does not have a right to see the scores of other staff.
Can we still calculate redundancy payments on the basis of an individual’s age, or would that be classed as age discrimination?
Yes you can. Under the Employment Equality (Age) Regulations 2006, which came into force on 1 October 2006, the length-of-service factor used when calculating redundancy payments – and the cap of 20 years on the length of service that can be taken into account for the calculation – has been retained. However, the current upper (65) and lower (18) age limits for redundancy pay rights have been removed, as well as the tapering down rule – where redundancy payments diminish the closer an employee is to retirement age – for the final year before retirement. Interestingly, the potentially indirectly discriminatory two-year qualifying length of service provision that an employee must comply with to receive a redundancy payment has not been removed by the age regulations.
Pensions postponement delays redundancy plans