Collective Redundancies

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Collective consultation for redundancies is required when there are 20 or more staff members at risk of losing their job. It is quite a significant undertaking for any business and needs careful planning and consideration before, during and after the process. The key steps involved in the process are:

Step 1

Before notifying the employees of anything you should identify:

  • The structure of your team
  • Why it is no longer working
  • How you might want the team to look including multiple options if appropriate
  • Why that will improve the issues identified at point 2
  • Which employees are affected by this and who does similar work (all employees doing the same or similar work should be considered for the ‘pool’ of at risk employees)

By carrying out this exercise you can ensure that you do not unduly upset staff that do not need to be placed at risk of redundancy and can identify any other options available to you.

Step 2

Notify the affected employees that they are at risk of redundancy at a meeting and confirm this fact in writing. If there is a recognised trade union you should notify them of the plans and that collective consultation is required. Notify the Secretary of State for Business, Enterprise and Regulatory Reform of your plans.

Step 3

If there is no trade union organise election of employee representatives who will then represent all of the at risk employees during step 4 and onwards where appropriate.

Step 4

Hold a period of consultation with the affected employees with a view to avoiding compulsory redundancies if at all possible. This may involve changing your plans identified at Step 1 if more sensible/practical options are identified. This may involve a series of meeting and discussions. Where there are less than 100 employees likely to be made redundant in a 90 day period this consultation period must last at least 30 days and where more than 100 at least 45 days. There is no prescribed number of meetings you must have with the representatives in that time.

Step 5

If no options are identified at Step 4 you should identify an objective selection criteria and try and agree this with the employee representatives.

Step 6

Once the selection criteria has been determined whoever scores least well should be invited to a final consultation meeting at which they may be dismissed if no alternatives are available.

Step 7

Give redundant employees the right to appeal.

In the event of a failure to comply with the statutory procedure summarised above and a claim being brought against you for unfair dismissal, as well as ordinary compensation potentially being due to the employees the Tribunal may also make a protective award of up to 90 days salary per employee as a penalty for not complying with the appropriate procedure. 

It is important therefore that all employers seeking to take this step receive comprehensive advice as to their position at every step of the way.  

If you are looking to restructure your business or your team please contact our Employment Law Team on 01279 755777 or get in touch with Gary Smith, Partner in our Employment Team.

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