Redundancy consultation

In a redundancy situation, employers are required to consult with individual employees, Employers must consult trade union or elected employee representatives if more than 20 employees are affected within a 90 day period.

Consultation also applies to employees who have volunteered for redundancy.

Individual consultation

Individual consultation is necessary for all redundancies. Whilst the Acas code of practice does not apply to redundancy dismissals, employers are still expected to follow a fair and transparent process. Employers should meet affected employees to:

Explain the rationale for the proposed redundancy
Discuss the proposals and any alternatives to redundancy
Discuss the individual’s particular circumstances
Explain any (provisional) selection criteria
Set out any options for redeployment
Explain any provisions to be made to support the employee in searching for work

A separate meeting should be arranged to consider further developments or inform the employee of any final decision. The employer should write to confirm any decision taken and to inform the employee about their right to appeal.

The employee may be accompanied by a workplace colleague or TU representative during formal consultation meetings. Individual consultation may take place in parallel with collective consultation.

Collective consultation

The law requires that, if the number of employees affected is to be 20 or more, the employer must consult with employee representatives or trade union officials (Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1995).

The representatives should be informed of:

The reasons for the proposed redundancies
The number and type of employees intended for redundancy
The total number of particular types of such employees
The proposed method of selection for redundancy
The proposed procedures and timescale of implementing redundancies
The proposed method of calculating redundancy payments other than statutory requirements.

Consultation timetable

The consultation should begin in 'good time', that is:

At least 30 days before the first dismissal if between 20 and 99 employees are to be dismissed within a 90-day period
At least 90 days before the first dismissal if 100 or more employees are to be dismissed.
Where less than 20 employees are affected, whilst there is no legal timeframe in which to consult with staff, best practice is to consult for a period of 30 days. Failure to consult is likely to render the dismissal unfair.

Consultation must be 'fair', that is, the representatives should be met while the redundancy proposals are still at an early stage. They should then be given enough information on the proposed redundancies and enough time to digest it before making an informed response. The employer must then seriously consider their response.

The outcome of consultations

An employer is not obliged to agree with or implement the employee representatives' response, but is obliged to conduct the consultation fairly and in accordance with the organisation's procedures.

Employees selected for redundancy should be informed of their right of appeal that, where practical, will be heard by a senior manager or trustee who is not directly involved with the redundancy situation.

Notifying the Department for Business Innovation and Skills

If an employer intends to make 20 or more employees redundant they must notify the Department for Business Innovation and Skills (BIS) in writing. A form (known as HR1) is available from the BIS website for this purpose.

The reason for this advance notification is so that BIS has an opportunity to provide help in finding alternative work or retraining for the impending redundant employees.

Notification does not mean the redundancies will necessarily take place, but simply that the employer foresees a situation where redundancies are likely.

The minimum time limits for notification are:

At least 30 days before the first dismissal if between 20 and 99 employees are to be dismissed within a 90-day period
At least 90 days before the first dismissal if 100 or more employees are to be dismissed within a 90-day period

Employers who fail to notify BIS in advance of making 20 or more employees redundant are liable to a fine of up to £5,000.