Redundancy: the options
The redundancy consultation process
If you fail to consult employees in a redundancy situation, any redundancies made will almost certainly be unfair.
Collective redundancy notification
A collective redundancy is when you plan to make 20 or more employees redundant at one establishment within a 90-day period.
Steps you must take:
- Fill in advance notification of redundancies form HR1. Employers must send a copy of this form to the representatives of the employees being consulted. You must also return this form to the Northern Ireland Statistics and Research Agency at the address listed on the form, where the information is collated, then passed onto the Department for the Economy (DfE) for information.
- Consult with workplace representatives. These may be either trade union representatives and/or elected employee representatives for those employees not represented by a union. If your employees choose not to elect employee representatives, you must give the relevant information directly to each individual.
Collective redundancy consultation
Consultation must start when you are developing redundancy proposals and at least:
- 30 days before the first redundancy where there are 20 to 99 proposed redundancies
- 90 days before the first redundancy where there are 100 or more proposed redundancies
An employer who has already begun consultations about one group of proposed redundancy dismissals and later finds it necessary to make a further group redundant does not have to add the numbers of employees together to calculate the minimum period for either group.
It is not necessary that consultation should last for all of that time. Further, where consultation has not been completed by the end of the 30 or 90 day period, employers should continue the consultation beyond the 30 or 90 day period.
In other words, the consultation has either resulted in agreement with employee representatives, or has otherwise reached its conclusion. If consultation has been completed within the 30 or 90 day period, the employer may issue the notices at that point. As referred to above, employers should consult beyond the 30 or 90 day minimum where the consultations are not yet complete but in some cases it could be longer where the combination of the consultation and the notice exceeds the period. This timetable can be shortened where an employee might have decided to leave early or take voluntary redundancy.
The obligations may apply even when an employer intends to offer alternative employment on different terms and conditions to some or all of the employees, with the result that the number actually dismissed is less than twenty or in fact where no dismissals occur; this will be the case if employees are to be re-deployed on such radically different terms and conditions that accepting the new posts amounts to dismissal and re-engagement.
The obligations apply to compulsory redundancies, but in some circumstances may also apply to 'voluntary' redundancies if an employee has no real choice whether to stay or to leave.
If you fail to carry out collective redundancy consultation, affected employees may claim a protective award from an Industrial Tribunal - see potential problems following redundancy.
It is good practice to consult employee or trade union representatives even if fewer than 20 redundancies are planned.
In addition, where there are no representatives present or when there are no representatives elected to conduct consultation, it is good practice to meet with all individuals who are at risk of redundancy, regardless of whether it affects more or less than 20 employees.
DfE must receive the notification on form HR1 at least:
- 30 days before the first redundancy where there are 20 to 99 proposed redundancies and before the individuals have received personal notice of termination
- 90 days before the first redundancy where there are 100 or more proposed redundancies and before the individuals have received personal notice of termination
Late notification, or failure to notify, is an offence and you may be liable to a fine up to £5,000.
Redundancy: information and consultation (I&C) agreements
If you have an I&C agreement in place, you have a duty to inform and consult employees or their representatives on changes to the workforce. This means that you may have to inform and consult on any proposed redundancies.
You do not have to inform and consult at the same time under both the redundancy and the I&C legislation - you can choose instead to 'opt out' of your I&C agreement and consult under the redundancy legislation only.
What information must you provide?
At the start of the consultation, you must provide written details of:
- the reasons for redundancies
- the numbers and categories of employees involved
- the total numbers of employees in these categories
- how you plan to select employees for redundancy
- how you will carry out redundancies
- how you will work out redundancy payments
- agency workers: the number of agency workers, where they are working in the business and the type of work they are contracted to undertake
Consultation does not have to end in agreement, but it must be properly carried out with a view to reaching agreement, including ways of avoiding the redundancies or reducing their effect.
Individual redundancy consultation
You should consult employees individually regardless of the number you plan to make redundant. While there are no fixed timescales within which this consultation must take place it should be of a sufficient timescale to be meaningful in the individual circumstances.
If you fail to do so, any subsequent dismissals may be unfair - see unfair dismissal.
The Labour Relations Agency (LRA) redundancy webinar provides useful information on the topic of redundancy and how to ensure the redundancy process is managed fairly and in line with employment legislation.
LRA Workplace Information Service03300 555 300