Correctly managing a collective redundancy can be difficult, so you need to be aware of the legal rules surrounding this topic.
What is collective redundancy?
This situation is unlikely to arise in smaller companies.
However, you’re expected to implement a process in situations where there are 20 or more employees facing redundancy at any “one establishment” within a period of 90 or fewer days.
What’s the purpose of a collective redundancy consultation?
It ensures a fair process, allowing affected employees to understand the reasons behind the redundancy.
From a business perspective, it ensures you have the opportunity to suggest any alternative courses of action, such as laying off employees or allowing for job-sharing options.
Employees also receive an opportunity for employees to take redundancy on a voluntary basis.
How a collective redundancy consultation process works
A collective consultation for redundancy generally begins by letting affected employees know they’re at risk through their appropriate representatives.
These individuals are typically trade union representatives. Or they're internal staff body with the mandate of handling redundancy situations.
It’s normal to give this information in a letter. This triggers the start of the minimum period for collective consultation.
The statutory minimum periods, as set out in UK law, are as follows:
- When the employer is proposing to dismiss 100 or more employees, consultations should begin at least 45 days before issuing notice.
- Where between 20 and 99 redundancies are ahead, consultations should begin at least 30 days before issuing notice.
Remember, the statutory minimum guidelines only provide an acceptable minimum redundancy consultation period and this should always begin in good time.
You must use clear and objective selection criteria when deciding which employees to make redundant.
You’ll also need to individually consult with the staff members who you select before you provide them with any notice of dismissal.
They should be able to see their scores and you should allow them to challenge the result. Provide the lowest-scoring with a notice of redundancy, although they can still appeal the decision if they want.
This can be a difficult process to get right and if you’re unsure of the best methods for doing so, it’s advisable you seek further advice and assistance.
Why you should follow collective redundancy rules
Keep in mind non-compliance can result in costly unfair dismissal claims. This can include the likes of an employment tribunal.
To ensure you follow the rules, some collective redundancies may receive a referral to a Redundancy Panel.
The panel will determine whether the redundancies are being carried out to replace current employees with those on lower pay or with less favourable terms and conditions.
These types are exceptional collective redundancies and aren’t a legal practice.
Need more help?
Contact us for immediate assistance with any employee-related issues, including redundancy: 0800 880 7992.