What happens in a redundancy consultation?

Wednesday February 15, 2023

A redundancy consultation is where the employer and their employees discuss why redundancies are being considered and how they can be avoided. Whether face-to-face or conducted remotely, a redundancy consultation is a legal obligation.

This guide will focus on items that your organisation needs to cover during the different types of redundancy consultations.

What Must Be Discussed at a Redundancy Consultation?

Redundancy consultations must cover all of the following topics so they meet the legal threshold and ensure transparent and clear communication between you and the employee. Redundancies can be compulsory or non-compulsory, with the former being where the employee has no choice since selection is done by the employer.

Non-compulsory redundancy allows employees to volunteer for redundancy or take other options such as early retirement. The following items must be discussed:

  • Why the employer is making some employees redundant

Employers can declare staff redundant because the skills are no longer needed, the entity is closing down, changing location, or changing the way it works.

  • How the employer chose employees who will be made redundant 

It is important to show affected parties that the selection has been done fairly and in accordance with employment legislation. Criteria such as performance, skills and disciplinary records are some of the fair attributes that employers can opt to include. Attendance is subject to further discussion (absence related to a disability or maternity for example wouldn’t be included, for example).

  • What form of support the employer may provide to affected staff

It can be anything from counselling to helping them get new jobs by revamping their CVs and referring them to entities that may be hiring.

  • What possible alternatives can be considered instead of redundancies
  • Any other arising concerns for the affected employees

Communicate clearly with the affected employee or employees during the session. It’s important to keep an open mind and listen to what your employees have to say. They may have suggestions and ideas that could help avoid job cuts. By working together and trying to reach a mutually beneficial agreement, both you and your employees can have the best possible outcome from the meeting.

Individual Redundancy Consultations 

This is a private meeting between representatives of the employer and the affected employee. In some cases, you can allow the employee to have a companion for support. However, this is not a legal requirement for the consultation. 

While you will strive to get agreement during the consultation, it may not always be possible. But bear in mind that, when an employee leaves the organisation, they can be powerful ambassadors or detractors for your company, depending on how well or poorly they feel they were treated.

Individual redundancy consultations apply when the employees being dismissed are 19 or fewer in number. There are no rules about how to conduct such consultations. Since these are sensitive and complex meetings, you should ensure that the managers who convene the meeting have the skills and knowledge to successfully run them. It’s great if the meetings can run in a way that does not add further distress to employees.

You or the manager conducting the redundancy consultation will need to:

  • Know how the redundancy is planned including key dates and the process
  • Have information to share with the employee about why they have been chosen
  • Create a document that has answers to key questions
  • Deliver information in a humane, professional way
  • Maintain composure and focus on creating a calm environment
  • Stick to the meeting’s agenda to meet their objectives

Collective Redundancy Consultations 

When 20 or more employees become redundant at the same time, a different set of rules apply to the consultation, with affected employees having the power to elect members to represent them through the process.

Here are some of the legal requirements:

  • Notify the Redundancy Payments Service (RPS) before starting the consultation. If the number of people being made redundant is between 20 and 99, notify 30 days prior. Where redundancies are 100 people or more, notify 45 days before the redundancy. Failure to stick to these timelines can lead to fines.
  • The consultation must be with union or elected employee representatives. If there are no representatives, hold the meeting directly with the affected staff.
  • Inform representatives or staff about the proposed redundancies. Give them time to consider this information.
  • Respond to questions and requests from the representatives or staff
  • Give notices to staff, with the agreed departure dates
  • Once the consultation is complete, you can issue redundancy notices

If the redundancies range between 20 and 99, the consultation must happen 30 days before the dismissals are effected. With dismissals of 100 or more employees, the consultation must happen 45 days before the dismissals take effect.  Information that must be shared with staff or their representatives include:

  • Reasons for redundancies
  • Number of staff involved and their categories
  • How many staff are affected in each category
  • Employee selection criteria for the redundancy
  • How the redundancy will be done
  • How the redundancy payments will be decided

Employees on fixed-term contracts are not part of the consultation unless their contracts end prematurely.

Notice Periods and Pay

Where you have given notice periods that exceed the statutory notice periods in contracts, the contracts are binding. Other payments that the employee is entitled to include pensions and private health insurance if these items are in their contracts.

The statutory notice period is one week’s notice for employees who have completed one month but worked no more than 2 years. Employees who have worked for the company from 2 to 12 years will get a week’s notice for each year they have worked. Any staff with more than 12 years service will get 12 weeks’ notice.

Besides statutory redundancy pay, you can choose to pay through the notice period or pay in lieu of notice. Calculate notice pay based on the employees’ weekly average earnings over a 12 week period before the start of the notice period. 

While no employer wants to handle redundancies, the process can be run professionally and smoothly to minimise harm to the employer and employees. Pay particular attention to how the redundant staff are treated, and the rules around how to handle the processes. 

At The HR Dept, our redundancy consultation service can help smoothen the process and prevent fines and other risks that arise from redundancy processes. Get in touch today to find out more.

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