On 6 April 2013, new consultation periods came into force for collective redundancies.
As before, the law does not specify a minimum period of collective consultation. Collective consultation must however be ‘meaningful’ and, importantly, must start at least a specified number of days before the redundancy dismissals take effect.
Collective consultation – continuing and new requirements
Collective consultation is required where an employer proposes to dismiss as redundant 20 or more employees from the same establishment within a period of 90 days or less.
Where that number of employees is 20 – 99, collective consultation must start at least 30 days before the dismissals take effect. The law has not changed in this regard.
Where the number of employees to be dismissed is more than 99, the minimum period has been reduced – from 90 days to 45 days. The time limit for lodging form HR1 has also been reduced to 45 days.
Employers should be aware, of course, that consultation must still be meaningful – which, depending on the circumstances, could mean delaying dismissals to allow for longer consultation.
Employers should also remember that collective consultation will need to take place with recognised trade unions or elected representatives, and so should allow plenty of time for any election process to take place before the minimum periods start.
The new time limits apply to all redundancies where the proposal to dismiss is made after 6 April 2013.
Counting the number of employees
Employees whose fixed-term contracts are coming to an end will not ‘count’ towards the total number of employees to be made redundant for the purposes of collective consultation legislation. It is always worth considering such contracts as part of your redundancy planning, as it may mean the difference between consulting for 30 or 45 days, or even not consulting collectively at all.
Voluntary redundancies will ‘count’ towards the total.
Failure to comply
Tribunals can still award up to 90 days’ pay per employee where an employer fails to comply with the minimum statutory requirements.
The protective award has therefore been given real ‘teeth’, as not complying with the minimum periods for consultation can now work out much more expensive than simply continuing employment (and paying salaries) during the 30- or 45-day period.
In light of the changes, ACAS has produced a guide to collective redundancies. This non-statutory guidance sets out a summary of the law, and provides a helpful 10-point checklist for employers who are carrying out collective redundancies. It also provides tips on creating selection matrices and collective redundancy policies.
As the ACAS guide points out, collective consultation can often be a complex area. Employers should therefore always ensure that they are fully prepared well in advance of any redundancy situation, and will need to consider carefully (with legal advice as required) whether and how any collective consultation obligations are triggered.