With the ongoing pandemic affecting businesses, and the furlough scheme rolling to a close, redundancy and collective redundancy is becoming an unfortunate necessity for many organisations of all shapes and sizes.
When an employer is looking to dismiss 20 or more staff at one establishment within a 90-day period, this requires a process called collective redundancy. How does this play out in practice?
How does collective redundancy work?
A long-established engineering firm with lucrative supply contracts to large oil companies has been heavily impacted by the pandemic. Their major clients are all cutting costs, and the orders are no longer coming in.
Many of their hundred or so staff were placed on furlough earlier in the year, but as this scheme winds up, the reality is there isn’t enough work coming in, and cuts need to be made, including to the staffing budget.
Because it looks likely that more than 20 redundancies may need to be made at the same time and in the same location, the employer begins the consultation process at least 30 days before the first dismissal will be made.
It’s important to note that the employer has not made any final operational decisions at this point, because that would imply that the consultation process was a meaningless formality, leaving them open to accusations of unfair dismissal.
The employer establishes who may be affected by the redundancy. This doesn’t just mean those who may lose their job, but anyone else within the company who will be impacted.
The employer is required to consult with a representative of the affected employees, who in this case is a union rep. The employer provides the rep with information on which departments may be affected, how many staff in total may need to be made redundant, and how the staff will be chosen for redundancy. They also provide details of what kind of redundancy payment will be offered, and the timeframe for the redundancies to take place.
During all meetings with the representative, detailed notes are kept. These may be useful at a later date if an unhappy employee decides to challenge the fairness of the process. It’s vital that any decisions made can be justified down the line.
And to ensure that the appeal process can run smoothly, two senior managers are kept out of the consultation process. This means they can be impartial should an appeal be raised at a later date.
Because the consultation is a two-way street, the representative offers alternatives to the redundancy that has been proposed by the employer. In this case, they make suggestions for voluntary redundancy, reducing working hours for all staff, and pay cuts.
Although the employer considers these options, they don’t have to take them on board if they don’t want to. In this case, the company decides to offer voluntary redundancy across the workforce, and several staff express an interest. However, even with volunteers taken into account, the company still need to make further redundancies.
The employer also takes the time to consult with each member of staff who is affected by the collective redundancy. Because this is happening during a pandemic, this is done at a distance where possible. And staff who are furloughed or working from home, are able to attend meetings remotely if they agree to this. There is no legal requirement for a consultation to be face to face.
Staying on the right side of employment law
Redundancy is never easy, but ensuring the process remains transparent and fair is vital to keeping your back covered when it comes to unfair dismissal claims. The best way to do this is to seek expert legal support from the outset.
We can help, please call Lloyd Clarke on 01206 239761 for a free initial chat.