As a result of the COVID-19 pandemic a large number of employers have unfortunately just started or are about to start large-scale redundancies. The scale of the likely redundancies in the next six months is extremely worrying.
What rights do employee representatives have to assist their colleagues during collective consultation? How can they get the best out of the process for their colleagues? This article explores this issue further.
Employer obligations in a collective consultation process
If an employer intends to make 20 or more employees redundant within a period of 90 days or less, they must follow UK “collective consultation” laws. If not, a protective award may be paid to all affected employees.
Once an employer proposes redundancies, they have a duty to inform and consult with appropriate representatives (trade union representatives, directly elected representatives or a standing body of elected or appointed representatives) of the affected employees.
Period of consultation
Firstly, it is the employer’s duty to ensure that consultations begin in good time.
Depending on the scale of the redundancies which are proposed, certain time periods apply.
- Where 100 or more redundancies are proposed, consultation must begin at least 45 days before the first dismissal takes effect (this period was reduced from 90 days on 6 April 2013).
- For fewer than 100 redundancies, the minimum period which must elapse is 30 days.
Although there are no set rules when less than 20 redundancies are proposed, it is good practice to fully consult with the employees and their representatives.
If no consultation takes place, in such cases any redundancies which are made may be held to be unfair.
Duty to inform
The employer needs to provide information to the representatives or staff about the proposed redundancies and give them enough time to consider it.
The following written information must be provided as a minimum:
- the reasons for the proposed dismissals;
- the numbers and descriptions of employees whom it is proposed to dismiss;
- the total number of employees of such description employed by the employer at the site in question;
- the proposed method of selecting employees for redundancy;
- the proposed method of carrying out the dismissals, with due regard to any agreed procedure, including the period over which the dismissals are to take effect;
- the proposed method of calculating the amount of any redundancy payments to be made (over and above the statutory redundancy payment);
- “suitable information” about its use of agency workers.
The employer also has a duty to respond to any requests for further information throughout the consultation period.
Duty to consult
The consultation period must be used as a method to reach an agreement on:
- ways to avoid the dismissals; or
- reducing the number of dismissals; and
- mitigating their consequences.
Once the consultation is complete and it is final that the redundancies are unavoidable and that dismissals will take place, the employer has a duty to give any affected staff termination notices showing the agreed leaving date.
What is fair consultation?
“Fair consultation” is defined as:
- consultation when the proposals are still at a formative stage;
- provision of adequate information on which to respond;
- provision of adequate time in which to respond;
- conscientious consideration of the response to consultation;
- consultation entered into with an open mind and with a willingness to be persuaded;
- giving the body consulted a fair and proper opportunity to understand fully the matters about which it is being consulted and to express its views on those subjects, with the consultor thereafter considering those views properly and generally.
This final element emphasises that the quality of information provided is crucial to proper consultation.
5 key tips for the employee representatives
1. Throughout the consultation process, representatives should ensure they are provided with detailed written information including details of the proposed redundancies.
The reps should carefully and persistently probe the information provided by the employer about reasons for the proposed dismissals, the number of employees affected, the proposed method of selecting affected employees, and the method of carrying out the dismissals and the redundancy payments.
Representatives must ensure that as much information as possible is provided by the employer and if they feel that further clarification is required, then they must request further information. Knowledge is definitely power in a consultation process.
2. During the consultation period, representatives need to ensure that all alternatives to redundancy are fully explored.
Suggestions which can be brought forward to avoid dismissals (ideally backed up by evidence and detailed data) may include:
- other ways of making costs savings;
- staff accepting reduced hours or, say, a 4-day week;
- pay reductions (for an indefinite or definite period);
- staff agreeing to extended furlough periods;
- staff agreeing to take sabbaticals or undertaking volunteer work; and
- the employer filling alternative vacancies in the business with affected staff.
The reps need to be ready, where the employer is acting in an unhelpful or even obstinate manner, not to take no for an answer and to argue that the employer is not engaging in fair consultation.
3. Representatives should attempt to seek the best possible redundancy terms for the employees.
For example, representatives could suggest there be enhanced terms, e.g. two weeks’ pay for each week worked or no cap on severance pay (there is a statutory cap now of £538/week) for weekly pay, or that staff should receive full notice pay and should not be obliged to work their full notice period.
4. Throughout the redundancy process, the representatives may wish to ensure that the consultation period does not end too soon.
The representatives should continue to ask questions and seek clarification from the employers at all stages of the consultation period. All alternatives need to be fully explored and the best terms need to be negotiated for the employees before it can be accepted that the consultation period has ended. An employer may argue that the reps, despite being unhappy with the length of nature of consultation, have agreed to the ending of the process. The reps should be live to this point.
5. Employment tribunal claims may be brought.
Complaints can be made in relation to a breach of the statutory rules governing the election of employee representatives and in relation to a failure to inform and consult more generally.
Bringing a claim
A complaint must be made either before the last of the proposed dismissals takes effect or within the period of three months starting with the day on which the last dismissal occurs (subject to the rules on Acas early conciliation, under which the time limit may be extended).
Amount of protective award
Each employee who is covered by the protective award is entitled to a “week’s pay” for each week of the protected period and a proportional sum for each part week.
The length of the protected period is at the tribunal’s discretion. The tribunal must make such award as they consider “just and equitable in all the circumstances having regard to the seriousness of the employer’s default”, but with a 90-day maximum in all cases.
A week’s pay
The statutory maximum of a week’s pay does not apply in these circumstances. The award is therefore for actual gross weekly pay for each employee.
Claims for consultation may be supported in some cases by your legal expense insurance or household contents insurance. Quite often, affected employees also pool resources to source legal advice on a claim.
For further information, please contact Paul Daniels at Keystone Law using the below contact details.
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.