This article is divided into Eight Parts for easier reading:
- Part 01: Background.
- Part 02: Redundancy Pay and Taxes.
- Part 03: Redundancy and Consultation.
- Part 04: Suitable Alternative Work and Finding Other Work.
- Part 05: Redundancy and Other Factors.
- Part 06: Redundancy and Insolvency.
- Part 07: Directors.
- Part 08: Miscellaneous.
Part 03: Redundancy and Consultation
- If you are an employee affected by redundancies, by law your employer must consult you.
- This should be given at the earliest opportunity and before any final decisions have been made.
- This is even if you are not at risk of redundancy yourself.
- You will usually have a face-to-face meeting with your manager or the person leading the redundancy changes.
- The meeting can take place over the phone if you both agree to it and there is a clear need, for example if you work remotely.
- By law they must meet you at least once.
- They might need to meet you more than once to make sure they can respond to your suggestions or requests.
The consultation should involve:
- Reasons for the planned redundancy;
- Details of the selection criteria;
- Details of why you have been selected;
- Any issues you have with the process;
- What time off you will have to look for a new job or training;
- How the business can restructure or plan for the future;
- Alternatives to redundancy (if possible); and
- Details of the redundancy payment.
The consultation does not have to end in agreement, but it is important the employer takes the time to properly consider the employee’s response. In other words, your employer does not have to make the changes you suggest but they do need to show that they have listened to you, considered your ideas, and tried to come to an agreement.
An employee should only be made redundant once the employer has finished consulting everyone.
3.1 What are Collective Redundancy Rules?
If your employer is making 19 redundancies or less, there are no rules about how they should carry out the consultation. Employers are not legally obliged to allow employees at risk to bring a representative to the consultation. However it is recommended that the employer permits this, as doing so will help the employer avoid an unfair dismissal claim.
If the employer is making 20 or more redundancies at the same time, the collective redundancy rules apply, and the consultation should take place between your employer and a representative, which can be either:
- A trade union representative (if you are represented by a trade union); or
- An employee representative (if you are not represented by a trade union or if your employer does not recognise your trade union).
- An individual elected or otherwise appointed to represent employees, for example, for the purposes of an information and consultation exercise during a collective redundancy or transfer of an undertaking subject to TUPE, or for the purposes of an information and consultation agreement.
- Under the Takeover Code, a representative of an independent trade union, where that trade union has been recognised by the bidder or the target company in respect of some or all of its employees; and any other person who has been elected or appointed by employees to represent employees for the purposes of information and consultation.
- The Takeover Code requires certain information and documents to be provided to employee representatives of the bidder and target company during a takeover offer.
- Employees affected by the proposed redundancies can stand for election (or be appointed) as an employee representative or vote for other representatives.
Your employer does not need to include you in collective consultation if you are employed under a fixed-term contract, except if they are ending your contract early because of redundancy.
3.2 What Must the Consultations Cover?
Collective consultations must cover (in writing):
- Ways to avoid redundancies;
- The reasons for redundancies;
- The number of employees and which jobs are at risk;
- The plan for selecting employees for redundancy;
- The plan for carrying out redundancies, including timeframes;
- How redundancy pay will be calculated;
- How to keep the number of dismissals to a minimum;
- How to limit the effects for employees involved, for example by offering retraining; and
- Details of any agency workers the employer is using.
Your employer must also meet certain legal requirements for collective consultations.
The employer should have a:
- Trained person to lead the consultation;
- Clear way of presenting the redundancy plan; and
- Questions and answer document.
3.3 How Long will the Consultation Last?
There is no time limit for how long the period of consultation should be, but the minimum is:
- 20 to 99 redundancies: The consultation must start at least 30 days before any dismissals take effect.
- 100 or more redundancies: The consultation must start at least 45 days before any dismissals take effect.
3.4 What is a Protective Award?
- An award which an employment tribunal may order an employer to pay to its employees under TULRCA where the employer has failed to inform and consult the employees’ representatives when proposing to make 20 or more redundancies.
- Often used to describe a similar type of award made under TUPE for failure to inform and consult prior to a transfer of an undertaking, although the term ‘protective award’ does not appear in TUPE.
3.5 What is a Redundancy Letter?
It is good practice for an employer to inform an employee(s) face-to-face that they are going to be made redundant. The employer should also let the employee know in writing, which should include:
- The notice period;
- Leaving date;
- How much redundancy pay is due;
- How the employer calculated the redundancy pay ;
- Any other pay the employer owes the employee (for example holiday pay);
- When and how the employer will pay them; and
- How the employee can appeal.