Collective consultation

Your employer is legally obliged to consult over collective redundancies if they plan to make 20 or more redundancies; if the redundancies are in one establishment; and if they plan to make the redundancies within 90 days.

There is no simple, legal definition of an 'establishment'. It could mean more than one place, or a place where the employees do not habitually work. It could be either an entire organisation or a 'distinct entity' within it. ACAS says – in its useful guide, Managing Large-scale Redundancies – that whether a workplace can be classed as an establishment depends on the answers to the questions:

  • Is it a distinct entity?
  • Does it have a degree of permanence and stability?
  • Does it have the ability to carry out the tasks it has been assigned?
  • Does it have a workforce, technical means and organisational structure that allow it to carry out its function?
ACAS: Handling large-scale redundancies
  • 29 Aug 2017
  • Publications

Law at Work 2020 points out (Law at Work 2020, p 408) that employees at smaller business units therefore have weaker statutory redundancy consultation rights than those at larger units, despite the fact they all have the same employer and face the same concerns over redundancy.

ACAS gives the example of a national retail company which is switching its business online. It decides to close three stores. The total number of employees at risk of redundancy across the three stores is more than 20. However, because each store operates as a 'distinct entity', the redundancies would be handled separately and the business might not need to hold a collective consultation.

When your employer counts how many roles they are planning to make redundant, they should include voluntary redundancies. For example, if they intend to make 24 employees redundant but six of them volunteer, there must still be a collective consultation. They should also include anyone who is being redeployed or moved to an alternative role.

Anyone on a fixed-term contract which is approaching the end of its agreed term should not be included. Nor should any employees who are already taking part in a collective consultation process in a separate redundancy situation.

Employers should not stagger redundancies in an attempt to escape their duty to consult collectively. For example, they might try to make several, smaller groups of staff redundant over a longer period of time.

Collective consultation timescales

Your employer must not take decisions on any redundancies before they carry out a collective consultation. They should allow enough time to consult employees and their representatives, and include any of your suggestions which they agree to.

If your employer intends to make between 20 and 99 redundancies, the consultation should begin at least 30 days beforehand. If they intend to make at least 100 redundancies, the consultation should begin at least 45 days in advance.

You should check if your employer has a policy in place which covers how long a consultation lasts. There is no legal maximum period. ACAS emphasises that a consultation can last longer than the minimum periods, especially if the situation is large-scale or complicated.

Your employer is not legally obliged to reach agreement with their employees in order to end the consultation process. They must, though, be able to demonstrate that the consultation was genuine, and carried out with the aim of reaching agreement, in order to reduce the risk of unfair dismissal claims. The employer must also show that they listened to their employees, and responded to questions and suggestions.

In order for unions to have a genuine influence on any proposals around redundancy, the consultation must happen while the plans are at a 'formative' stage (Law at Work 2020, p 410). Case law means that if an employer is considering a strategic decision which would inevitably cause redundancies, they must consult with unions on the economic case behind it, and not just on how to implement the subsequent redundancies.

ACAS tells employers to complete any collective consultation before moving to private consultations with individual employees. However, it says employers should exercise flexibility, as they may sometimes need to run collective and individual consultations together. For example, if an employer has agreed with a union how many employees will be made redundant, and how they will be selected, but consultation continues about other issues related to redundancy, it may be appropriate to begin individual meetings with those affected.

Consultation is at a formal end when agreement is reached on all the relevant issues, or when there is a failure to agree. The 30 or 45-day periods mentioned above are not upper limits to consultation. The process should continue if there are issues on which agreement might be reached with further negotiation (Law at Work 2020, p 413).

The process of collective consultation

Consultation should include 'open and honest' conversations about the redundancy process, and employers should 'consider other options' with employees and their representatives. Your employer should discuss their plans with you, and ask for your ideas on:

  • The proposals.
  • Any ways to avoid or reduce the redundancies.
  • How to lessen the effects of the redundancies.
  • How employees are selected for redundancy.
  • How the business or organisation can restructure or plan for the future.

While ACAS says your employer is not bound to accept your suggestions, they should 'seriously consider' them. Otherwise, you could claim the redundancy process is unfair. Employers should document any discussions and the reasons behind their decisions.

If your employer decided to make redundancies before beginning consultation, and therefore did not seriously consider any alternatives, they could well face a 'protective award'. This is compensation awarded by an employment tribunal when an employer fails to consult an employee before making them redundant. This can be up to 90 days' full pay for each affected employee. The same situation arises when an employer insists at the start of the process that their proposals are not open to negotiation (Law at Work 2020, p 412).

There is no statutory cap on a protective award unless the employer is insolvent, so the costs could quickly rack up for an employer who fails to consult properly. Reps could use the prospect of a protective award as a negotiating tool to persuade a reluctant employer to consult as they should (Law at Work 2020, p 418).

There are, rarely, circumstances when it may not be reasonably practical for your employer to consult collectively. In this situation, they may be able to use the defence of 'special circumstances'. Special circumstances are not defined in law, so an employment tribunal would consider each situation on its individual merits. ACAS describes special circumstances as 'truly unexpected situations'. It gives the example of an employer becoming insolvent. If the insolvency was sudden and unexpected, a tribunal might accept an argument of special circumstances. But the argument might be rejected if the employer had known for some time that they were having financial difficulties.

Your employer is entitled to hold remote, rather than face-to-face, consultations during the coronavirus pandemic.

Union rights to be consulted

If your employer is engaged in a collective consultation, they must consult any recognised trade union. You must not be treated unfairly in the redundancy process because you are an NUJ rep, or an employee representative (see next section).

If you are an NUJ rep, you have the right to paid time off in order to take part in the consultation process, and to be trained in how to represent your members.