Redundancy – what is a Consultation Period?

Views: 2,445

Share this article...

Redundancy should include a Consultation Process with employees.

Where dismissal is due to redundancy, an employer should normally follow a period of ‘consultation’ with its workforce.  The dismissal (because of redundancy) must be seen to be ‘fair’, and the consultation period in the redundancy process is a critical part of achieving that – i.e. being seen to be fair.

What is a fair Redundancy Process?

A fair redundancy process will involve several stages.  It will (of course) follow the employer having finalised their business rationale for needing to make redundancies.  The redundancy process will then include:

  • Selection criteria set
  • Consultation meeting
  • Volunteers – employees asked if anyone would like to take voluntary redundancy
  • Offer alternatives – those selected for redundancy will be offered or given the chance to apply for any available suitable opportunities within the business (if any)
  • Appeals – an appeal against redundancy isn’t a requirement but as best practice should always form part of a fair process

What does ‘at risk of Redundancy’ mean?

Being put at risk of redundancy means that you are potentially going to be selected for redundancy.

Say you’re one of a team of 10, and your employer has put all 10 at risk of redundancy, with a view to making 3 redundancies from the team to reduce numbers down to 7.  All 10 are ‘at risk of redundancy’ but only 3 will eventually be selected and dismissed because of redundancy.

It can be very stressful being at risk of redundancy, because you don’t know if you’ll be one of those selected, or if you’ll be safe after the selection process. Putting employees at risk is part of a fair redundancy consultation process, though, in that they should be informed of the employer’s proposed reduction in staff numbers, rather than being ambushed with a decision that’s already been made.

How long is a Redundancy Consultation Process?

Where less than 20 employees are at risk of redundancy there is no set minimum time that a redundancy consultation process should last. Generally, a redundancy consultation process can be completed in one to three weeks depending on the numbers involved and any selection process(es) that are required.

Where 20-99 employees are proposed to be made redundant, the consultation period should be a minimum of 30 days from the start to the point at which dismissal(s) take place.

Where it’s proposed to make more than 100 employees redundant, the consultation period should start at least 45 days before any dismissals.

Who should an Employer consult with?

Consultation should take place with all affected employees.  That includes those not at risk of redundancy but who will be affected by the changes, and can therefore catch employers out if they forget to consult with everyone affected.

For instance, if you plan to remove a unique role from the organisation and transfer the duties to another role, you should consult with the employee who holds the other role about the impact on them of the proposed removal of the unique role. Their workload will increase if you go through with the proposal.  If you impose an increased workload without consultation, you could be facing a grievance, or ultimately a constructive dismissal claim.

In cases where 20 or more redundancies are proposed, consultation should be with representatives from each team/department.  Large scale redundancy exercises are complicated and are governed by their own rules.  There isn’t space here to go into the detail but do ask us for help if this applies to you.

With large scale redundancy Trade Unions may need to be consulted.

How should an Employer consult with their employees?

We’ll stick with smaller scale redundancy exercises for this, so the following applies to cases where 19 or fewer redundancies are proposed.

The employer should have individual consultation meetings with all employees at risk of redundancy, as well as with anyone else affected by the proposals.  Hold as many individual consultation meetings as are necessary to complete the process.

Consultation is a two way thing, so employees should be able to put forward their own views and suggestions for ways to avoid redundancy. Employers should be seen to go away and consider any suggestions. Employers should also let employees know about any vacancies elsewhere in the organisation and ensure that employees selected for redundancy are offered suitable alternative employment if anything is available.

Alternative roles don’t have to be created, but there are any vacancies elsewhere, especially if they are or may be suitable for any of the redundant employees, employers are expected to make employees aware of them.  It can be appropriate to offer a suitable alternative vacancy to a redundant employee – and women on maternity leave have special protections in this regard.  Alternatively, it can be appropriate to conduct a competitive interview process if there is more than one employee for whom an alternative role is suitable.

It’s only if there is no workable alternative to their role disappearing (for whatever reason) that the employee is confirmed as redundant.  Then, if there is no alternative role elsewhere in the organisation, it’s at that point that the employee is confirmed as being dismissed because of redundancy.  Often, no alternatives are available, so this is a single step, but really it’s two separate points to consider.

What happens if I’m put at risk of redundancy or made redundant while on maternity leave?

Women on maternity leave have additional special protections in cases of redundancy.  Speak to us for full advice, because there are often several things to consider, including your desired outcome. In brief terms, if you are made redundant while on maternity leave, you’re entitled to be offered any suitable alternative roles.

What if I’m offered a settlement agreement when I’m being made redundant?

Employers will often offer additional compensation in return for signing a settlement agreement.  There are various reasons for this, not all of which are necessarily an indication that the employer has acted unfairly.

Employees must get independent legal advice for a settlement agreement to be valid, so you’ll find yourself discussing the situation with your solicitor in any event. We can advise on whether the offer covers all your entitlements on termination, and check whether the compensation offered reflects the circumstances.

Need more help with Redundancy?

If you need more help with the subjects covered here then do reach out to our expert redundancy solicitors.  You can speak to our employment solicitors online via email or call us on 03300 020 863.

Share this article...