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What consultation must an employer undertake before making redundancies?
In every redundancy, the employer should consult as far in advance as possible. This consultation should be aimed, for example, at:
- looking at ways in which redundancies can be avoided, minimised or their effects mitigated;
- deciding how redundancy selection is to be carried out, for example:
- deciding on the rules used to identify those at risk of redundancy (such as selection criteria, and the weight to be attached to each criterion); and
- deciding on the selection method, including who is to be in charge of scoring, how scores will be checked for accuracy and consistency, how many individual consultation meetings there will be, their timetable and so on;
- meeting with individual employees at risk of redundancy so they can make their case properly; or
- talking through the implications of redundancy for those affected, including offers of training, support, reskilling, job search and so on, as well as redundancy payments.
Employees at risk of redundancy must be given the chance to comment on their individual results in any scoring exercise.
Where it is intended to make 20 or more employees redundant, the employer must inform and consult the recognised union at least 30 days before notice is given of any dismissals. This rises to at least 45 days where 100 or more redundancies are involved.
If there is no recognised union, the employer must make arrangements for the election of employee representatives with whom consultation will then take place within the same minimum timeframe.
An employer that fails to engage in adequate collective consultation over redundancies risks a large financial penalty called a protective award.
Often, especially where a union is recognised, there is a negotiated redundancy consultation procedure in place.
Fair consultation involves:
- the employer consulting when its proposals are still at a formative stage (i.e. when it first realises that there may be a need to make redundancies). If consultation only starts once the decision to definitely make redundancies has been taken, this will be too late;
- providing reps with adequate information so that they can understand what it is proposing, as well as why the employer is making those proposals;
- giving reps adequate time in which to respond to its proposals;
- conscientious consideration by the employer of the reps' response to its proposals; and
- consultation over avoiding dismissals, reducing the number of dismissals, and mitigating their consequences.
This is one of the most common areas where employers get it wrong.