Collective Consultation for Redundancies

Making workers redundant can be fraught with legal pitfalls. Employers are under strict obligations to follow specific procedures including, where applicable, collective consultation with affected individuals. This is to help ensure that the redundancy process is fair, providing employee representatives and affected staff with the chance to have their say and make alternative suggestions. In some cases, suggestions made during the consultation process may even help to identify ways to avoid or reduce redundancies.

The following practical guide for employers, HR and managers tasked with dealing with the redundancy process examines the collective consultation rules, from what these are and when they apply, to the risks for employers when failing to comply with these strict rules.

 

What is redundancy consultation?

 

Redundancy is a type of dismissal when a job role is no longer needed, and even though a genuine redundancy scenario will provide the employer with a potentially fair reason for dismissal, they must still follow a fair process before selecting employees for redundancy. This means that they should consult with all affected staff about the fact that redundancies are necessary, where consultation is about discussing and coming to an agreement with employees on how the redundancy process will be carried out, prior to this taking place.

Importantly, the employer can only give an employee or employees notice of redundancy once they have finished consulting with everyone affected by the redundancy process.

 

What is collective consultation for redundancies?

 

There are two different types of redundancy consultation: individual and collective consultation. By law in the UK, in circumstances where 20 or more redundancies from a single establishment are planned by the employer within a period of 90 days, the employer must collectively consult before consulting with employees individually.

Collective consultation is where the employer must consult on their proposed redundancy plans with any recognised trade union or, alternatively, with elected employee representatives if employees are not represented by a trade union or a trade union is not recognised by the employer. Trade union or employee representatives are there to represent the interests of affected staff within the collective consultation process. They do this by:

 

• telling employees about the redundancy proposals and sharing information
• asking employees for their views, suggestions and any questions they may have
• talking to other representatives and working out a collective staff response
• meeting with the employer to discuss the staff response
• engaging in open discussions to solve problems and reach agreements
• telling employees the outcome of the consultation.

 

The collective consultation must cover the reasons for the redundancies, ways to avoid redundancies or how to keep the number of dismissals to a minimum, as well as how to limit the effects for employees involved, for example, by offering retraining. Having consulted collectively about the proposed redundancies, the employer must also individually consult with each affected employee. Individual redundancy consultation is where the employer speaks with employees on a one-to-one basis, where what has been discussed collectively may not always incorporate the individual interests of all staff.

Where applicable, both collective and individual consultations must take place before the employer makes any selections for redundancy and notifies employees of their decision.

 

When do the collective consultation rules apply?

 

An employer must always follow the collective consultation rules if they are making 20 or more employees redundant within any 90-day period at a single establishment. However, even where the proposed redundancy scenario does not fall within the scope of the rules, such as where there are fewer than 20 redundancies planned, or a longer period applies or redundancies are spread across more than one establishment, it is still good practice for employers to fully consult employees and any trade union or employee representatives.

By collectively consulting with all affected employees and their representatives, even if not strictly required by law, this can help to reduce any negative effects on employees, keeping staff fully informed and hopefully making the overall redundancy process feel fairer.

Additionally, employers should check if they have any policy or agreement in place requiring them to collectively consult trade union or elected employee representatives, regardless of how many redundancies they are planning. The contracts of employment in place may also set out a particular process or certain rules that must be followed.

Where an employer is planning less than 20 redundancies or collective consultation is not otherwise a mandatory requirement, perhaps because redundancies are being made from different establishments or at different times, collective consultation will not be necessary. In these circumstances, the employer can move straight to individual consultations. An establishment is the site where an employee is assigned to work, where a single establishment could be an entire organisation or a distinct entity within an organisation.

When counting how many employees could be made redundant, voluntary redundancies must be included, for example, if an employer plans to make 22 employees redundant but 5 of them volunteer for redundancy, the employer must still collectively consult. Equally, those being redeployed or moved to alternative roles should still be included, for example, if an employer plans to make 17 employees redundant and offer 4 employees alternative roles, the total number is 20 or more, so the employer must again collectively consult.

However, anyone on a fixed-term contract that is coming to the end of its agreed duration does not need to be included, and if collective consultation on a separate redundancy situation has already commenced, those already affected are not included, although employers cannot deliberately stagger redundancies to avoid the need for collective consultation, such as by making smaller groups of staff redundant over a longer period.

 

What are the timeframes for collective consultations?

 

When proposed redundancies fall within the scope of the collective consultation rules, the timeframes involved will depend on the number of redundancies that need to be made.

Unless there is a policy or agreement in place that has rules for how long consultations should last, there is no time limit in this context, but there is a minimum period before any employees can be officially dismissed. If between 20 to 99 redundancies are proposed, the employer must collectively consult at least 30 days before, while for 100 or more redundancies, they must start the collective consultation process at least 45 days before.

In cases where collective consultation applies, the employer must usually collectively consult before individually consulting with affected employees, although there may be certain situations when collective and individual consultations need to be run at the same time. For example, if the employer has been able to agree with trade union or employee representatives the number of staff to be made redundant and the way in which they will be selected, but they are still consulting about other redundancy-related issues, it may be appropriate to start individual consultation with each affected employee.

In cases where collective consultation does not apply to the redundancy scenario, there are no set rules as to when individual redundancy consultation should be conducted, provided there is sufficient time to consult each affected employee. This means ensuring that reasonable discussions can take place where employees have enough time to raise any suggestions and for these suggestions to be factored in if the employer agrees to them.

However, employers should bear in mind that if they choose only to consult individually, absent the benefit of trade union or employee representatives to collectively agree on how the redundancy process will be carried out, instead discussing these broader issues with each member of staff, the process of individual consultation can take far longer.

It is also worth noting that even where collective consultation applies, or the employer elects to collectively consult, consultations are likely to last longer than the minimum periods outlined above if it is an especially large or complicated redundancy situation, where additional time should be allowed for this to ensure that the process is still fair.

 

What is the collective consultation process?

 

The collective consultation process involves a number of important steps, including:

 

• notifying the Redundancy Payments Service (RPS) before a consultation starts, where the deadline here will depend on the number of proposed redundancies
• consulting with trade union or employee representatives
• allowing employee representatives to be elected where there are none
• providing information to trade union or employee representatives about the planned redundancies, giving representatives enough time to consider them
• responding to any requests for further information
• giving any affected staff termination notices showing the agreed leaving date
• issuing redundancy notices once the consultation is complete.

 

Notifying the RPS

 

Before embarking on the collective consultation process, the employer must notify the Insolvency Service’s RPS of the potential redundancies by completing an advance notification of redundancies using Form HR1. The deadline for notifying the RPS will depend on the number of proposed dismissals, where notification to the RPS must be given 30 days before the first redundancy when making 20 to 99 redundancies, and 45 days before the first redundancy when making 100 or more redundancies. The effective notification date will be treated as the date on which the RPS receives the completed form.

There is a statutory requirement for the government to assist employees facing redundancy but, to do this, employers must notify the RPS of any potential redundancies. It is therefore important to notify the RPS so that the government can help affected employees, where the RPS, acting on behalf of the Secretary of State for Business and Trade, will collect the information provided and distribute this to the appropriate government departments and agencies who offer job brokering services and/or training services to help affected staff.

If the employer operates from more than one site, each one will be treated separately for notification and consultation purposes. As such, the employer must complete Form HR1 for each site where 20 or more redundancies are proposed. The employer must also send a copy of the notification to the representatives of the employees being consulted.

 

Collectively consulting

 

Having notified the RPS, the employer must then collectively consult with trade union or (elected) employee representatives. There may be employee representatives already in place, for example, as part of an information and consultation agreement. If there are no employee representatives in place, the employer must arrange for representatives to be elected for this purpose. Employee representatives can be elected specifically for the collective consultation, but the employer may need to provide training for the role.

If an employee is affected by the proposed redundancies, they will have the right to vote for employee representatives or even to stand for election themselves. If nobody within the single establishment from which the redundancies are being made wants to be elected as an employee representative, the employer can consult with affected staff directly, but this approach should only be adopted as a matter of last resort.

As part of the collective consultation process, the employer must provide written details to the trade union or employee representatives (or staff if there is none) of the following:

 

• the reasons for the proposed redundancies
• the job roles at risk and the number of roles affected
• the details of any agency workers the employer is using and their roles
• how the employer plans to select employees for redundancy
• how the employer plans to carry out the redundancies
• the proposed timeframe for the redundancy process
• how the employer will calculate any redundancy payments.

 

The primary purpose of collective consultation is to discuss and hopefully come to an agreement with the representatives on how the redundancy process will be carried out. As such, consultation does not have to end in agreement, but it must be carried out with a view to reaching it, including ways of avoiding or reducing the proposed redundancies.

 

What are the risks of breaching the collective consultation rules?

 

If an employer fails to comply with the collective consultation rules, employees can make a claim to an employment tribunal. If the tribunal claim is successful, the employer may have to pay the employee or employees compensation. This is known as a protective award and can amount to up to 90 days’ full pay for each employee affected by the redundancies.

Additionally, if the employer fails to collectively consult, either correctly or at all, any redundancies made will almost certainly be unfair and for which the employer could again be exposed to a risk of tribunal processings. A claim for unfair dismissal could arise where the collective consultation rules appear to have been complied with, but the tribunal is not satisfied that the consultation was genuine, for example, where the employer failed to listen and appropriately respond to the questions and suggestions made on behalf of staff. It could also be where the employer has tried to avoid the collective consultation rules, for example, by staggering redundancies using smaller groups over more than 90 days.

Finally, any failure to comply with the statutory notification requirements to provide advance notice to the RPS without good cause may also result in an unlimited fine.

 

Need assistance?

 

For expert advice and support with any aspect of the redundancy process, contact us.

 

Collective consultation FAQs

 

What is a collective consultation?

A collective consultation (applicable when making 20+ redundancies within 90 days at a single establishment) is where the employer must consult on their redundancy plans with any recognised trade union or elected employee representatives, before individually consulting with affected employees.

What is consultation in redundancy?

Consultation in redundancy refers to the requirement to provide employees and, where applicable, trade union or employee representatives, with information about the proposed redundancies and to give them the opportunity to discuss various issues relating to the redundancy process.

Last updated: 8 February 2024