3.4 Ensuring fairness: Consultation

In Lesson 3, we discussed the first two requirements (listed below) that ought to be followed in order to avoid claims for unfair dismissal. In this lesson we will consider the third.

1. That the employee was dismissed due to a genuine redundancy situation.

1. That those you select for redundancy are selected fairly.

1. That you have entered into a period of appropriate consultation.

Appropriate Consultation

If an employer proposes to make 19 or less employees redundant within a period of 90 days or less, it needs to individually consult with all the affected employees. There is no need for any consultation with staff representatives.

However, if an employer proposes to make 20 or more employees redundant at the same establishment within a period of 90 days or less it must consult on its proposal with the appropriate representatives of the affected employees. This is known as collective consultation. In such circumstances, the employer must also notify the Secretary of State for Business and Skills using a HR1 form.

For the purposes of collective consultation, ‘redundancy’ has quite a wide definition and is likely to include voluntary redundancies (see lesson 2) and any employees under two years who an employer may have elected to ‘let go’ first.

What is an ‘establishment’?

It is important to determine what an establishment is if you are making a small amount of redundancies (i.e. less than 20) across a number of different stores, sites or premises. The recent Woolworths case decided that although Woolworths made far in excess of 20 redundancies across the company, they only had a duty to collectively consult in the individual stores where 20 or more redundancies were being made.

If you are in any doubt as to whether your proposed redundancies are at one establishment, you should contact P4B Law for more detailed advice.

What is an appropriate representative?

Appropriate representative may cover three separate situations, as follows:-

1. Representatives of a Trade Union recognised by the employer

1. Staff representatives not appointed for the sole purpose of redundancy consultation

1. Staff representatives appointed specifically for the purposes of consulting on redundancy.

In respect of the first two scenarios, it is highly likely that these representatives will be in place prior to any redundancies being proposed and therefore no further work will be required by the employer.

In the third scenario, it is probable that the employer will have to run a secret ballot for the purposes of identifying which representatives are elected. This is something that P4B Law can advise you on in more detail should the need arise as some election processes can be tricky to run.

What Consultation should be done?

The first step should be for the employer to provide the relevant information in writing to the staff representatives or where there is less than 20, the employees directly. This should include the reasons for the dismissals, the number of employees who may be made redundant, the selection method, what the process will be, how the redundancy pay will be calculated and information on agency workers.

Once the information has been provided, the employer must then arrange a series of meetings with the affected employees and their representatives (if necessary), whereby they consult on the redundancies. This is an opportunity for the staff to be provided with more information and also to suggest alternatives to redundancy.

It is important that employers enter into this process fully, provide detailed and clear information regarding the redundancies and actively listen to staff suggestions. If they do not then a Tribunal may find that they have not consulted properly and that the redundancy was therefore unfair.

Usually, a redundancy procedure can be frustrating for both employees and for employers as very often the same issues are discussed over the course of several meetings. Whilst we do appreciate this, it does ensure that employees feel that they have had every opportunity to meet with the employer, to put forward ideas and to fully understand the reasons behind the dismissal. If this is the case, it makes the employee far less likely to bring a claim for unfair dismissal against the employer.

What if Collective Consultation does not take place?

If employers do not collectively consult on redundancies then an Employment Tribunal may award up to 90 days’ pay (uncapped) for each affected employee. This is known as the Protective Award.

How long should Consultation take?

Where an employer is proposing to dismiss less than 20 employees in the space of 90 days, there is no set timeframe, however it must be enough time for them to enter into ‘reasonable’ consultation with the employees.

In cases where the employer is proposing to dismiss as redundant more than 20 but less than 100 employees in the space of 90 days, the first dismissal should not take effect for a period of 30 days after consultation first began.

Where the employer is proposing to dismiss as redundant 100 or more employees in the space of 90 days, the first dismissal should not take effect for a period of 45 days after consultation first began.

Alternative Employment

A fair redundancy procedure will always require an employer to consider whether there is any suitable alternative employment available.