A Complete Guide to Collective Consultation Redundancy: What Employers Need to Know

In times of economic uncertainty or structural changes, businesses may need to make redundancies. When making large-scale redundancies, employers must adhere to collective consultation requirements to ensure compliance with employment laws. This guide explains what collective consultation redundancy is, the legal obligations for employers, and best practices to handle the process effectively.

What is Collective Consultation Redundancy?

Collective consultation redundancy occurs when an employer plans to dismiss 20 or more employees within a 90-day period at a single establishment. The process ensures employees and their representatives are adequately informed and consulted about the proposed redundancies, giving them an opportunity to respond and propose alternatives.

Legal Requirements for Collective Consultation

Employers must follow specific legal procedures when carrying out collective redundancies. The key requirements include:

1. Notifying the Government
   Employers must inform the appropriate government department about planned redundancies:

   • At least 30 days in advance if 20-99 redundancies are proposed.

   • At least 45 days in advance if 100 or more redundancies are proposed.

2. Engaging in Meaningful Consultation
   Employers must consult with:

   • Trade unions (if applicable)

   • Employee representatives (if no trade union is present)
     The consultation should discuss ways to avoid redundancies, reduce the number of dismissals, or mitigate the effects of job losses.

3. Providing Relevant Information
   Employers must provide written details of:

   • The reasons for redundancies

   • The number and category of affected employees

   • The selection process and criteria

   • The timeframe for redundancies

   • The redundancy payment process

4. Fair Selection and Consideration
   Employers should ensure fair and objective selection criteria based on factors such as skills, experience, and performance, avoiding discrimination.

Consequences of Non-Compliance

Failure to follow collective consultation rules can lead to employment tribunal claims, where affected employees may be awarded up to 90 days’ gross pay as compensation. Additionally, businesses could face reputational damage and financial penalties.

Best Practices for Employers

To ensure a smooth and legally compliant redundancy process, employers should:

• Start Consultation Early: Allow sufficient time for meaningful discussions.

• Be Transparent and Honest: Provide clear reasons and necessary information.

• Consider Alternative Solutions: Explore options like redeployment, voluntary redundancy, or reduced working hours.

• Support Affected Employees: Offer career support, retraining, or outplacement services.

• Document Everything: Maintain records of all consultations and communications to ensure compliance.

Conclusion

Collective consultation redundancy is a legally required and ethically important process that ensures employees are treated fairly during redundancies. By following the correct procedures and implementing best practices, employers can minimise risks, protect their reputation, and ensure a smooth transition for both affected employees and the business.