With many businesses experiencing significant financial stress in the context of the current Covid-19 pandemic, some are unfortunately facing the prospect of redundancies. If more than 20 redundancies are proposed at a single establishment within a period of 90 days, the legal obligation arises to collectively consult. Accordingly, many employers are now having to remind themselves of the rules around collective consultation.
Here we look at five tips employers should keep in mind when embarking on the collective consultation process:
Keep on top of timing
You need to start consulting "in good time" and, as a minimum, at least 30 days before the first dismissal takes effect where 20-99 dismissals are proposed. A minimum 45 day consultation period will be needed if you’re proposing to dismiss 100 or more employees. Remember that a tribunal can issue protective awards of up to 90 days’ gross pay per affected employee if an employer fails to effectively inform and consult about proposed redundancies. Unfair dismissal and discrimination principles will also apply in the usual way.
Don’t forget your HR1
If you’re proposing to make over 20 redundancies within a period of 90 days, you need to notify the Department for Business, Energy and Industrial Strategy (BEIS) at least 30 or 45 days before the first dismissal takes effect (depending on the number of employees involved). Failure to submit this notification is a criminal offence which can lead to a possible unlimited fine and/or prosecution of company officers.
Get appropriate reps in place before you start consulting
You need to consult with “appropriate representatives” of affected employees. “Appropriate representatives” are trade union representatives or, if there is no recognised union, directly elected representatives (i.e. elected specifically for the purpose of redundancy consultation), or members of an existing internal employee forum whose mandate would include consultation about redundancies (but who are not specifically elected for redundancy consultation). Often, employers prefer to consult with representatives directly elected by the affected employees, rather than a standing body, but it may be easier in current circumstances with many employees working at home or furloughed to use a standing body if it has the mandate, to avoid the complication of holding an election. Note that “affected employees” includes any employees affected by the proposed dismissals or by measures proposed to be taken in connection with the dismissals. Be sure to include any employees who are not currently at work due to family-related absence or long-term sickness. Remember too that you will still need to collectively consult even if you reach the proposed reduction of the workforce by way of volunteers.
Make the consultation meaningful and remember to consult individually too
Collective consultation should be carried out with a “view to reaching an agreement”, so approach it with an open mind. The legislation doesn’t require an agreement to be reached, but it’s important the consultation is meaningful and doesn’t look like a “sham”. Feed through information to the appointed representatives as soon as it becomes available and take care over how you phrase your communications, so they are as clear as possible. Don’t forget that you still need to undertake individual consultation with at risk employees once the collective process has been completed.
Think carefully about written records
Encourage your managers and key personnel involved in the consultation process to write up a summary of any meetings as soon as possible and to keep them on file, so there is a clear record of the discussions that have taken place if needed in tribunal proceedings at a later date. Managers should be aware that all relevant written documents may become disclosable in any tribunal proceedings and that employees can access documents containing their personal data by making a subject access request under the GDPR. While verbal discussions and decision-making can be beneficial, it is important to have a written record of the rationale for key decisions.
How we can help
In dealing with the Covid-19 crisis, we all find ourselves in uncharted waters. The usual redundancy and consultation processes we are used to following need to be carefully adjusted to fit the current circumstances, particularly taking into account the impact of the Coronavirus Job Retention Scheme.
Our Redundancies in the context of Covid-19 webinar explores:
- The steps involved in a typical redundancy, and considers how they may be affected by the circumstances of the Covid-19 pandemic.
- Ways you can adapt your normal practices to address the challenges arising from lockdown and social distancing, particularly in relation to consultation.
- Top tips on how to handle potential Covid-19-related redundancy pitfalls in a way that minimises your legal risks and keeps the process on track.
In addition, if you would like further tailored guidance on managing redundancies, including how to undertake collective and individual consultation processes in your business, please call 0808 168 5874 or email us.
Make UK members can also access guidance on the law around redundancies, downloadable templates, forms and other helpful tools for managing a redundancy process and Furlough Letters and Resources Pack support in the HR & Legal Resources section of our website.