What does fair redundancy consultation mean?

All employers will be familiar with the need to follow a fair process of consultation in relation to any redundancy dismissals. But what does that mean? A recent Employment Appeal Tribunal decision underlined the importance of one aspect of the process, workforce or collective consultation at an early stage, that can easily be overlooked.

Where more than 20 redundancy dismissals are envisaged there is a statutory obligation to consult collectively. That will typically force the employer’s hand into collective consultation. However that is not the case with smaller scale redundancy programmes.

Where there is no statutory obligation to consult collectively, any employer dealing with a redundancy process may be tempted to limit the extent it consults with staff generally regarding proposed redundancies. Often that is a result of an entirely natural and human desire to minimize disruption, or even panic, within the workforce, so that it is only when a decision has been made that redundancies are necessary and there is a clear idea as to who may be affected that the employer begins consulting the individuals affected. Sometimes the reluctance to engage might be because the employer overlooks or ignores the possibility that other approaches to a potential redundancy situation may exist.

Both of the factors referred to encourage employers to delay engaging with staff or their representatives until the pathway forward has been decided upon. At that point employers will consult with individual employees on the impact of the proposed pathway on those individuals. Typically the individual consultation will be limited to issues such as selection or alternative roles.

The Employment Appeal Tribunal’s decision in De Bank Haycocks v ADP RPO UK Ltd reminds us of the importance of collective or workforce consultation and that an approach that short circuits that is potentially not fair. An essential part of a fair process is that the employer should consult at a workforce or collective level on redundancy proposals whilst those proposals are at a formative stage.  The purpose of that consultation is to avoid dismissal or reduce the impact of redundancies.

In other words an employer should be consulting with staff at a workforce or collective level on issues which may include the need for redundancies, alternative approaches, timetables and selection processes.

Whilst final decisions on these issues are likely to remain the preserve of the employer, a failure  to at least consult on them at the appropriate time may easily give rise to a finding of unfair dismissal.
For further information about any of the issues covered in this update please contact one of employment solicitors by email or call us on 03333 231 580.

About the authors

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Simon Bellm


Specialist in intricate employee relations and structural change matters and offering expertise in TUPE issues.

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