Employment Law Digest October 2024 – Navigating Large-scale TUPE Transfers
This article has equal application to the termination of service provider contracts in the private sector though; the principles…
These FAQs set out the common questions and pitfalls faced by employers when dealing with collective redundancy consultation.
Collective consultation is a complex area of law which places a number of strict obligations upon the employer, particularly around the beginning of the process. The penalties for not complying fully with collective consultation obligations are severe and we would encourage employers to seek legal guidance at the outset of a collective redundancy process as errors at this stage may be impossible to rectify. We have put together a toolkit of documents in order to assist you with this process, which is available for purchase. A full index of the documents available can be found below. For further information on the toolkit please get in touch
Collective consultation obligations apply where an employee is proposing to dismiss 20 or more employees as redundant at any one establishment within a 90-day period.
However, the definition of a redundancy dismissal for these purposes is wider than the test of whether the employee would qualify for a statutory redundancy payment. For example, it includes the following circumstances:
Where there is a trade union recognised for these purposes in respect of the workforce, the employer must consult with the trade union about the proposed redundancy dismissals.
Where there is a standard body of representatives in respect of the workforce (such as a Works Council), the employer should consult with them in the absence of a recognised trade union – but only if that body has authority to consult on behalf of the workforce about collective redundancies. Not all representative bodies can be said to have authority to consult on behalf of the workforce in these circumstances.
Where there is no trade union or appropriate standing body of representatives, the employer must arrange to hold elections for employee representatives. Similarly where there is a trade union or standing body which only represents a part of the workforce which is affected, the employer will need to arrange employee representative elections to cover the remaining workforce.
There are two key aspects to collective consultation: providing information to the appropriate representatives, and consulting about the proposed redundancies.
There is a prescribed list of information which is required to be given to the representatives at the very outset of the process. This requires employers to give extensive details of the proposals, the roles involved and the process which they intend to follow. This is generally given in a ‘section 188’ letter. Representatives will often request further information during the consultation process, and employers will generally be expected to provide this to enable meaningful consultation to take place unless there is a very good reason for not providing it.
The consultation aspect generally takes the form of several meetings between the employer and the employee representatives, who must also be given an opportunity to pass information to the individuals they represent. The consultation should cover a broad range of issues, such as whether the redundancies can be avoided or reduced in number, the applicable selection criteria to be used and the make-up of the applicable pools.
Collective consultation does not replace the need for individual consultation. Once the consultation process with the representatives has come to an end the employer then needs to conduct individual consultation meetings with those individuals at risk prior to issuing notice of redundancy.
No – this is a common misconception.
The law says that no redundancy dismissals can take effect within 30 days of the beginning of collective consultation (rising to 45 days where there are 100+ proposed redundancies). It is possible to conclude collective consultation, and individual consultation, provided that no notices of dismissal expire during this time.
However, employers should also guard against being seen to rush through the process and avoid an argument that they have not properly consulted and/or that some or all of the redundancy dismissals are unfair.
The main risk is that employers will be ordered to pay a ‘protective award’ if they are found not to have complied with their collective consultation obligations by an Employment Tribunal. Tribunals can make a ‘protective award’ of 90 days’ pay in respect of each employee, and this is not subject to the cap on a ‘week’s pay’ as other areas of employment law.
Furthermore, a failure to properly collectively consult may also give rise to a claim that one or more of the redundancy dismissals were not fair, and redundant employees may bring unfair dismissal claims on that basis.
Employers are also required to file a HR1 form at the outset of the process with the Government, providing certain details of the proposed redundancies. Failure to do so can actually constitute a criminal offence!
The basic principle of consultation is that it is approached with an open-minded and without any final decisions made regarding the redundancies. If employee representatives can show that the employer had already decided to proceed with the redundancies before consultation, this will almost certainly render any subsequent consultation process a sham. The duty to consult in a collective consultation situation generally arises much earlier than in a “standard” redundancy- the obligation arises at the point of the “proposal” to dismiss.
Most UK employers are not familiar with arranging representative elections, and many are therefore not sure where to start. Employers have some discretion over employee representative elections (such as how many representatives are required), but there are a number of strict rules and overriding principles which they must follow.
The process can be particularly challenging where some employees are out of the business (for example on long-term sick leave), as employers must ensure that all employees have a reasonable chance to participate in the elections.
Employers are sometimes tempted to try and rush elections as the 30-day clock won’t start ticking until the representatives are in place and have been given the required information. They risk sizeable protective awards if they do so in a way which doesn’t comply with collective consultation obligations.
Some of the information required to be provided by section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 is basic, such as the total number of the proposed redundancies and the specific roles which are at risk.
However, not all of the information is obvious by any stretch – for example, employers must provide details of their use of agency workers anywhere in the business. Although this may seem unimportant, a failure to provide this information is technically a breach of collective consultation obligations.
Collective consultation creates an extra layer of protection for employees; it does not remove their existing protection against unfair dismissal. Employers must still therefore consult with individual employees who remain at risk of redundancy following collective consultation, or risk unfair dismissal claims on the basis that they have not followed a fair procedure.
We have put together a toolkit of documents in order to assist you with this process, which are available for purchase and include:
For further information on the toolkit please contact us
Our toolkit of documents to assist you with collective redundancies is available to purchase. A list of all the document can be found in the last FAQ. If you wish to purchase the toolkit or have any questions, please get in touch.
Sorry, there are currently no documents in this area, please check back later.
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