Time To Talk – Changes To Redundancy Consultation

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Posted in:HR and Employment|May 20, 2013 | Join the mailing list

If an employer is proposing to end the employment of 20 or more people because of redundancy, then there are special consultation steps which the employer needs to go through first. It’s also important to remember that for the purpose of these special rules
"redundancy" doesn’t just mean ending someone’s employment because you are closing down a business or because of a reduction in workload. It also means any termination of employment where the reason for that termination is not to do with anything specific
to the employee concerned, such as something which he or she has done or said. This means, for example, that if an employer is looking at terminating the employment contracts of 20 or more employees because the employer wants them then to sign up to new, different
employment contracts, than the special consultation rules will apply.

The rules state that if an employer is proposing to end the employment of 20 or more people because of redundancy at a single establishment within a 90 day period, then the employer must first engage in a process of consultation about the proposed redundancies
with representatives of the employees concerned and that consultation must begin a fixed period of time before the first dismissal takes effect. Where the number of proposed dismissals is 20 to 99, then that minimum period is 30 days and if the number is 100
or more, then the minimum period used to be 90 days. However, that 90 day period has now been reduced down to 45 days, that reduction applying if the employer only began to propose to make the redundancies on or after 6th April 2013.

The legislation states that the employer must carry out the consultation with representatives of the affected employees and also states that where the employer recognises a trade union in respect of those employees, then those representatives must be from
that trade union.

If there’s no recognised trade union, then the employer can either consult with (a) representatives specifically elected by the affected employees for the purpose of this consultation process or alternatively (b) can consult with other representatives of
the employees concerned where those representatives have already been appointed or elected by the employees for some other purpose. 

However, if an employer decides to go along route (b) and consult with representatives who have already been appointed or elected for some other purpose, then the employer does need to take care. Route (b) will only apply if, looking at the reason why those
representatives were appointed or elected, it can be said that they have authority from the affected employees to receive information about and be consulted about the proposed redundancies. An employer choosing to go along route (b) might find that one of
the employees subsequently challenges whether the representatives actually had that authority and a successful challenge could lead to the employee concerned being awarded up to 90 days’ pay.

This risk was clearly shown in the recent case of Kelly v The Hesley Group Limited, where the employer chose not to go along the election route, but instead chose to consult a pre-existing Joint Consultative Committee about the
redundancies the employer was proposing to make. The Employment Appeal Tribunal decided that that it was not appropriate for the employer to choose to consult that committee about the redundancies, given that some of the people on that committee had been co-opted
by the employer onto the committee rather than having been appointed or elected by their fellow employees. The EAT also referred to the fact that the committee’s constitution said that it was not intended to be a negotiating body, the EAT stating that the
committee therefore did not have authority to engage in consultation with the employer about the proposed redundancies.

The lesson from this case is that while there’s been a shortening of the minimum consultation period for redundancies of 100 employees or more, employers should be wary of trying to short cut the process by consulting pre-existing employee bodies rather
than going through an election. Also, don’t forget that where there’s a recognised trade union in respect of the affected employees, then the consultation must be with representatives from that union.  

For more information about any of the above or for practical advice on these or any other aspect of employment law, please contact Nigel Crebbin of the Berg Employment Team on 0161 833 9211 or email us at
nigelc@berg.co.uk. Follow us at Twitter: #BergHR.
                                                                    
The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Berg or any of its partners or employees. Professional legal advice should
be obtained before taking, or refraining from taking, any action as a result of this article.

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