When making redundancies in the workplace, regardless of the number of redundancies that need to be made, employers must always follow a fair consultation process.
Below we provide employers with some practical advice on the individual redundancy consultation process in the context of small-scale redundancy scenarios, together with guidance on meeting the collective consultation rules for large-scale redundancies.
What is a redundancy consultation?
Employers may have to reduce workforce numbers of many reasons; they may have made changes to the way things are done or are doing things in a different way, either by restructuring the business or using new technology. In such circumstances where a certain job role, or roles, have become obsolete, redundancies may become necessary.
Even when job roles are genuinely no longer be needed, and the employer can show a fair and lawful reason for dismissing someone, the employer is still required by law to consult with affected employees on the reasons for the redundancies and to discuss with them the way in which the redundancy process will be carried out. This is known in employment law terms as “redundancy consultation”. The law deals with two types of consultation: individual redundancy consultation and collective consultation.
What is the difference between collective and individual redundancy?
Collective redundancy refers to large-scale redundancies of 20 or more employees in a 90-day period, where the employer must collectively consult with trade union or employee representatives, before individually consulting with each affected employee. In smaller-scale redundancies, only individual consultation is required.
What does the law say about individual redundancy consultations?
Redundancy is a type of dismissal when a job role is no longer needed, and even though a genuine redundancy scenario will provide an employer with a potentially fair reason for dismissal, they must still follow a fair process before selecting employees for redundancy. This applies regardless of how many redundancies are being made, although in small-scale redundancies only individual consultation will be required. This is in contrast to larger scale redundancies, where additional collective consultation rules must be followed.
Individual redundancy consultation is where the employer consults directly with all affected members of staff about the fact that redundancies are necessary, the reasons for this and and that their jobs are potentially at risk. This must be communicated to affected individuals prior to anyone being selected for redundancy. This process is also designed to explore any possible ways to make fewer redundancies and for the parties to attempt to reach an agreement as to how the redundancy process will be carried out. If an agreement cannot be reached, this does not negate the consultation process, although this process must be embarked upon in a genuine attempt to find a mutually agreeable way forward.
By law, employers can only give employees notice of redundancy once they have consulted with everyone affected by the redundancies. In the context of individual redundancy consultation, this means speaking directly with every employee whose job is at risk.
Employers’ redundancy consultation obligations
When it comes to redundancy consultation, the employer’s obligations will depend on the number of redundancies being made and when. This is because the collective consultation rules will only apply if the employer is proposing 20 or more redundancies from a single establishment within a period of no more than 90 days. Collective consultation is where employers must consult on their redundancy plans with any recognised trade union or elected employee representatives, before consulting with employees individually.
In cases where the employer is planning less than 20 redundancies, or where more redundancies are being made but from different establishments and/or at different times, provided the employer has not deliberately staggered redundancies to avoid the need for collective consultation, only individual redundancy consultation will usually be required.
However, even in the context of small-scale redundancies, if there is any redundancy policy or contractual agreement in place that requires the employer to collectively consult with trade union or employee representatives, this must be followed. Additionally, even where collective consultation is not required by law, rather than moving straight to individual redundancy consultation, employers may still choose to collectively consult to help speed up the process. This is because it can take far longer to agree how the redundancy process should be carried out with each affected employee on a one-to-one basis.
By collectively consulting with representatives, this can also help to make the process feel fairer, although individual redundancy consultation must still take place before the employer makes any selections for redundancy, even if collective consultation is conducted.
Employee redundancy rights
For any employee affected by redundancies proposed by the employer, individual redundancy consultation must be undertaken. If there is no legal requirement to collectively consult, there are no strict timeframes within which to speak directly with each employee, although the length of any consultation period must be adequate to fairly handle the redundancy process. When ensuring that reasonable discussions can take place, the employer must have regard to the possibility that the process of individual consultation can be more protracted without the involvement of trade union or employee representatives.
In cases where the collective consultation rules apply, in the context of 20 to 99 proposed redundancies, the employer must begin to collectively consult at least 30 days prior to the first dismissal taking place. If 100 or more redundancies are planned, the employer should begin the consultation process at least 45 days prior to any dismissal. In either scenario, the collective consultation must commence before any individual redundancy consultation.
However, the employer may need to be flexible around running collective and individual redundancy consultations, as there may be certain situations when these need to be run concurrently. This could be where, for example, the employer has reached agreement with trade union or employee representatives as to the number of redundancies to be made and the selection criteria to be used, but they are still consulting about other redundancy-related issues. In these circumstances, the employer may need to start the individual consultation with each affected employee to expedite the start date for dismissals.
What to discuss at an individual redundancy consultation meeting
There is no set agenda when conducting individual redundancy consultations, although absent any discussion with trade union or employee representatives, those matters which would be discussed on a collective basis must be discussed individually with each affected employee. In these circumstances, the consultation process should be used to explain the reason for the redundancies, together with any alternative options to avoid job losses. This process should also be used to try to agree how the redundancy process will be carried out.
During individual redundancy consultation meetings, discussions should include:
- what the employer is planning and why
- different ways to avoid or make fewer redundancies
- the skills and experience needed by the business moving forward
- the criteria to be used for selecting employees for redundancy
- any concerns that each employee may have and how these can be addressed
- how employees can be supported throughout this process, including arranging time off for them to attend interviews and to undertake any necessary job training.
When it comes to the different ways in which fewer redundancies can be made, possible options that could be explored by the employer and each employee could include:
- offering employees the option of voluntary redundancy, if not already considered
- finding suitable alternative employment within the business, if there are vacancies
- offering employees incentives to retire early, although this must be offered to everyone
- encouraging applications from staff to work flexibly, such as job shares or reduced hours
- reducing or prohibiting both overtime and new recruitment for the foreseeable future
- laying off self-employed contractors or freelancers from the business for the time being.
How should individual redundancy consultation be conducted?
An individual redundancy consultation provides the employer with the opportunity to discuss with staff the changes they are planning and why certain employees are at risk of redundancy. However, this process is not only about talking to each employee, explaining the situation, but about listening to what each person has to say about the proposals. This includes any suggestions that individuals may have for making fewer redundancies, where employees will often have good ideas that may help to avoid dismissal.
Equally, employers should not wait for employees to independently make suggestions, but rather encourage an exchange of ideas, asking for their thoughts on the proposed changes, together with ways to avoid or reduce the planned redundancies. Each employee should also be asked about the possible selection criteria to be used if redundancies cannot be avoided, as well as issues that might arise for them within this process, and the time off that they may need to look for a new job or to undergo any necessary re-training.
The aim of individual redundancy consultation is to make the process fair, providing everyone affected by this process with the chance to have their say and to suggest ways in which the situation could be approached differently. The employer does not have to reach an agreement with employees to be able to bring the consultation process to an end, but the employer must be able to show that each consultation was genuine and meaningful.
If the individual redundancy consultation process becomes subject to scrutiny by way of a tribunal complaint, the employer must be able to evidence that they have fully responded to any questions asked of them and carefully considered any employee suggestions, even if the parties disagree. This will not only require the employer to listen to what employees have to say, but to take detailed notes of each meeting to document what was discussed, in this way providing a clear record of the employer’s decision-making, if needed.
In most cases, the employer should meet with each employee more than once prior to making any redundancies to able to adequately discuss all the key matters and explore all available options, where consultation is an ongoing process. The employer should also consider allowing each employee to be accompanied at any consultation meetings, whether held in person or remotely, to help support the employee within this process.
Risks of breaching your duties during the redundancy process
Before making any selections for redundancy, an employer should always consult with all affected employees about their proposals — either individually, collectively or both — otherwise run the risk of any dismissal by reason of redundancy being classed as unfair.
Even though redundancy is one of the five potentially fair reasons for dismissal as set out under the Employment Rights Act 1996, if the employer fails to follow a fair process, any resulting dismissal can still be found by a tribunal to be unfair. A claim for unfair dismissal will not only be costly and time-consuming to defend, but the tribunal has the power to order the employer to reinstate an employee and to award significant damages in the employee’s favour. An unfair dismissal claim can also have a negative impact on the employer’s reputation and brand, with potentially adverse effects on workforce morale.
Additionally, there are significant risks associated with collective redundancy consultation, not least where an employer has tried to avoid collectively consulting by making small groups of employees redundant over more than 90 days. By failing to follow the collective consultation rules, where applicable, employees can again make a claim to an employment tribunal. In this context, a successful claim can result in a tribunal order for the employer to pay a protective award of up to 90 days’ full pay for each affected employee.
By law, employers must also notify the Redundancy Payments Service (RPS) of their proposed redundancies where they plan to make 20 or more redundancies within a 90-day period from a single establishment. If there are between 20 and 99 redundancies, the notification requirement must be satisfied at least 30 days prior to the first dismissal taking place, and 45 days before the first dismissal if there are 100 or more redundancies. A copy of the notification must also be sent to representatives of the employees being consulted.
If the employer fails to notify the RPS, either at all or in time, they could end up facing a significant financial penalty. If it is not reasonably practicable to comply with the minimum notification periods, the employer must make every effort do so as far as they are able, providing written reasons why they were unable to provide the information on time.
Need assistance?
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Individual redundancy consultation FAQs
What is individual consultation redundancy?
Individual redundancy consultation is where the employer consults directly with all affected employees about the fact that redundancies are necessary and the reasons for this, as well as trying to agree how the redundancy process will be carried out.
What do you say in a redundancy consultation meeting?
This process should be used to explain the reason for the redundancies and to explore any ways to make fewer job losses, plus the criteria for selecting employees for redundancy.
Can an employer make someone redundant without consultation?
By law, an employer must individually consult with all affected employees before selecting anyone for redundancy. If the employer is planning 20 or more redundancies within 90 days from a single establishment, they must also follow the collective consultation rules.
Last updated: 7 November 2023
Author
Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.
She is a recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.
Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals