A collective redundancy describes the situation in which 20 or more employees are made redundant within a 90 day window. Employees who are volunteering for redundancy must also be included in these figures.
Where it is proposed that more than 100 employees are to be made redundant then there is a legal requirement under the Section 193 (1) and (2) of the Trade Union and Labour Relations (Consolidation) Act 1992 to inform the Secretary of State for Business, Energy and Industrial Strategy. It is a criminal offence punishable by a £5,000 fine for an employer to fail to inform the Secretary of State.
The purpose of consultation is to look at ways of avoiding the dismissals; reducing the number of employees to be dismissed and mitigating the consequences of the redundancy.
Where there is a recognised union then union representatives must be informed so that collective bargaining can take place. Where no union exists then employees must be given the opportunity to elect representatives from among their number to negotiate on their behalf.
The wider consultation with union reps or elected members of the workforce does not remove the necessity to consult with individual employees.
Any consultation should take place in a timely manner. ACAS suggests that 45 days before the first redundancies are made is the appropriate amount however the minimum consultation period for smaller scale redundancies is 30 days.
Staff should be given the opportunity to make suggestions about how the redundancy situation can be avoided or reduce the number of job cuts required.
When does consultation commence?
Section 188(4) of the Trade Union and Labour Relations Consolidation Act 1992 sets out the minimum level of information that must be given to employee representatives at the start of the collective consultation process.
(a) the reasons for the proposals,
(b) the numbers and descriptions of employees whom it is proposed to dismiss as redundant,
(c) the total number of employees of any such description employed by the employer at the establishment in question,
(d) the proposed method of selecting the employees who may be dismissed,
(e) the proposed method of carrying out the dismissals, with due regard to any agreed procedure, including the period over which the dismissals are to take effect.
(f) the proposed method of calculating the amount of any redundancy payments to be made (otherwise than in compliance with an obligation imposed by or by virtue of any enactment) to employees who may be dismissed.
Consultations a sham?
Employers are not permitted to consult over redundancies where the decisions have already been taken, they must approach the need to make redundancies with a completely open mind and the consultation must be “genuine and meaningful”.
What to do if there is no consultation?
You can make a claim to an Employment Tribunal if your employer fails to consult you properly prior to making you redundant.
Employees on fixed term-contracts
If your employer is terminating your employment at the end of your fixed term contract then there is no requirement for them to go through a redundancy process. If your fixed-term contract is being terminated early then you should be consulted about your proposed redundancy.
Claimants who have been made redundant unfairly may claim up to 52 weeks pay in compensation.