Collective redundancies guidance
When an employer is considering making collective redundancies, there are some additional considerations and obligations which apply when the number of dismissals will be 20 or above at a single establishment within a 90-day period.
Minimum consultation periods
The employer must ‘consult’ the workers affected (and may wish to include workers who are not at risk of losing their job):
- at least 30 days before the first dismissal takes effect if 20 to 99 workers are to be dismissed from one establishment within 90 days
- at least 45 days before the first dismissal takes effect if 100 or more workers are to be dismissed from one establishment within 90 days
Who does consultation apply to?
Consultation applies to affected workers whose role is at risk. Voluntary redundancies and non-contractual redeployments are included in this total, so in a situation of 20 redundancies, even if 10 workers volunteer and five others are redeployed, the employer must still carry out a full consultation.
If a worker has a fixed-term contract and this is terminated early on the grounds of redundancy, then they must also be included in the total. However, if the fixed-term contract is simply allowed to expire with the appropriate notice given, then they do not.
Employers must start the consultation process ‘in good time’ and it must be a proposal, not a ‘done deal’. Workers should feel that the process is meaningful and that their representatives are given the chance to participate constructively.
What is an ‘establishment’?
Collective redundancies are dealt with within establishments. An ‘establishment’ is defined by the European Court of Justice as ‘depending on the circumstances, the unit to which the workers made redundant are assigned to carry out their duties.’
When deciding what an ‘establishment’ is for these purposes, it may be reasonable to assume that a workplace is an establishment if it:
- has a degree of permanence and stability
- has the ability to carry out the tasks it has been assigned
- has a workforce, technical means, and organisational structure to carry out its function
- An establishment could include more than one place or even a place where affected workers do not habitually work.
An establishment does not have to:
- be geographically separate from the rest of the business
- be independent (legally, financially, administratively etc)
- have a management structure which can independently effect collective redundancies
Consultation on collective redundancies can take place while workers are on furlough, and any duties performed by elected worker representatives do not represent work on behalf of the company and so do not break furlough.
Employers must consult with either:
- representatives of any recognised independent trade union
- other elected workers, if no trade union is recognised
The employer cannot choose who the worker representatives will be but can decide to allow the inclusion of representatives from areas of the business who are indirectly affected by the changes too.
During the consultation, the employer must disclose in writing to the appropriate representatives:
- the reasons for the proposed redundancies
- the numbers and descriptions of workers it is proposed to dismiss as redundant
- the total number of workers of any such descriptions employed at the establishment in question
- the way in which workers will be selected for redundancy
- how the dismissals will be carried out, taking account of any agreed procedure, including the period over which the dismissals are to take effect
- the method of calculating the amount of redundancy payment to be made to those who are dismissed
- agency workers: the number of agency workers, where they are working, and the type of work they are doing
The consultation must include discussions around ways of:
- avoiding the dismissals
- reducing the number of dismissals
- mitigating the effect of the dismissals
It may not be that the parties involved reach an agreement, but as long as there has been genuine consultation with a view to reaching an agreement, the employer can end the consultation.
Redundancy notices must not be issued until both the collective and individual consultations have been completed, and the actual dismissals must not take place until both the minimum period and the individual notice period has expired.
Mandatory legal notification
Employers are required by law to notify the Redundancy Payments Service of a proposal to dismiss 20 or more workers as redundant at one establishment within a period of 90 days or less.
Employers must make this notification at least 30 – 45 days (depending on number of dismissals) before the first dismissal, and before any notices of dismissal are issued. This information should be submitted using the HR1 Advance Notification of Redundancies form.
Please see SELECT’s interactive redundancy flowchart for further information about how to proceed.