Are there particular laws that apply when making multiple redundancies?
The simple answer is yes.
When an employee’s job may come to an end through redundancy (due to a downturn in work meaning that fewer employees are needed to meet demand), an employer will typically be alert to the need to implement a fair process before implementing the redundancy.
Most organisations appreciate that there are several protections available to employees under the Employment Rights Act 1996 (e.g. not to be unfairly dismissed) and under the Equality Act 2010 (e.g. not to be unlawfully discriminated against by being selected for redundancy because of one of the protected characteristics such as disability). However, quite separate to the above considerations, where multiple redundancies are proposed by an employer, there is an added tier of complexity and compliance due to the less well-known provisions of the Trade Union & Labour Relations (Consolidation) Act 1992 (TULRCA).
Collective Redundancy Consultation
Section 188 TULRCA sets out specific requirements for the provision of information and consultation with appropriate representatives of the workforce, in certain circumstances (typically referred to as “Collective Redundancy Consultation”). These provisions apply regardless of whether the workforce is unionised, and breach of the statutory requirements can expose to the organisation to considerable financial outlay, through Employment Tribunal claims on behalf of a large number of affected employees, from the particular workforce.
So first and foremost, when do the Collective Redundancy Consultation (CRC) procedures (defined in section 188 TULRCA) apply? The statutory provision provides that:
“Where an employer is proposing to dismiss as a redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be affected by the proposals dismissals or may be affected by the measures taken in connection with those dismissals.”
Section 1A then goes on to provide that “The consultation shall begin in good time and in any event
(a) where the employer is proposing to dismiss 100 or more employees… at least 45 days, and
(b) otherwise at least 30 days, before the first of the dismissals takes effect.
In a series of blog articles on multiple redundancy situations and Collective Redundancy Consultation (CRC), available soon on our website, we shall explain what an employer must consider when deciding whether it needs to carry out Collective Redundancy Consultation (CRC) and how to be alert to some of the potential pitfalls, in order to minimise the risk of financial claims, whilst managing the needs of the business to operate efficiently. We shall look at:
- The meaning of “proposing to dismiss as redundant”
- What is meant by “one establishment”
- How an employer consults with “appropriate representatives”
- How CRC fits with individual consultation
- The potential consequences of failing to comply (fully or partially) with the statutory CRC requirements
For further information or legal advice, visit www.blandy.co.uk.