We’ve been receiving a lot of questions about redundancy lately, particularly as companies start to think about whether or not all staff can return to work following furlough. We have previously provided information specifically about making employees redundant who are on furlough, and the following addresses the redundancy process in general, including when and how a business can make someone redundant.
This guidance answers the following question. You can click each question to be taken to the answer.
- When can I make redundancies?
- What about numbers?
- How long is collective consultation?
- How do we decide who to pick from?
- Can we have a pool of one?
- How do we select who is provisionally redundant from the pool?
- Can we give more weight to scores for particular criteria?
- What about vacancies in the company?
- What about employees who are pregnant or on maternity, adoption or shared paternal leave?
- Are there any notices which must be given by the company?
- What meetings or announcements are required?
- What happens at the first meeting?
- What about individual consultation meetings?
- Where there are no union or employee representatives, what happens where collective consultation is required?
- What documents will be required?
- How many consultation meetings are required for each individual?
- Do we have to allow employees to be accompanied in individual consultation?
- What risks are there in the process?
If you have any questions about specific circumstances you can contact us.
When can I make redundancies?
When there is a genuine redundancy situation which means either a closure of business, of the place of work, or a reduced need for employees to carry out work of a particular kind.
What about numbers?
Firstly, decide how many redundancies are proposed. If there are 20 or more in a 90-day period, then there will be an obligation to collectively consult with trade unions or elected employee representatives.
How long is collective consultation?
For 20 or more proposed redundancies but fewer than 100, there is a minimum consultation period of 30 days before the first dismissal can take effect. Where 100 or more redundancies are proposed, this period is 45 days.
How do we decide who to pick from?
You must establish the appropriate pool of candidates. This will usually be the job type from which redundancies are proposed but could be wider than that where those occupying roles which are to disappear have interchangeable skills relating to roles which are to be kept.
Can we have a pool of one?
Yes, but be careful to check that the person occupying the role does not have interchangeable skills relating to any role which is kept.
How do we select who is provisionally redundant from the pool?
It’s best to score each person in the pool against a set of selective criteria and to make these criteria objective, if possible. Sometimes, particularly where a new type of role has been created, it will be appropriate to select successful candidates for the role by selection interviews. This method should not be used in general preference to the scoring against criteria method.
Can we give more weight to scores for particular criteria?
Yes, particularly in relation to those criteria which will be particularly important for the business in future, for example, skills and performance.
What about vacancies in the company?
You must draw the attention of provisionally redundant employees to the availability of any vacancies, not only within the company, but also with any associated company. It does not matter what type of vacancy, nor the remuneration package. Provisionally redundant employees might just wish to apply for a lower paid vacancy, for example, rather than being redundant.
What about employees who are pregnant or on maternity, adoption or shared paternal leave?
There are special rules which apply, and you should seek professional advice. For example, a woman who is on maternity leave and is provisionally redundant must be offered any vacancy in priority to other employees. This is the one area of the law where positive discrimination is required.
Are there any notices which must be given by the company?
Yes, in the case of collective consultation where you must notify the Secretary of State on form HR1 if there are to be collective redundancies, this being at least 30 days before the first dismissal takes effect in the case of a proposal to dismiss 20 to 99 employees within a 90 day period, or at least 45 days in the case of a proposal dismiss 100 or more employees within a 90 day period.
What meetings or announcements are required?
There will be an initial announcement to all staff at risk, followed by meetings with the union or elective employee representatives (in the case of collective consultation) or an individual meeting with potentially redundant employees were there is no collective consultation or where collective consultation has finished.
What happens at the first meeting?
Whether or not you are dealing with collective redundancies, you should meet with all the employees who may be made redundant as a group. If this is not possible, because many of them are on furlough, you should make an announcement to all staff by alternative means (for example, by video conference or by email). You should explain the reasons for the potential redundancies, how many people are at risk, and that ways of avoiding redundancies are being explored (such as a freeze on recruitment, retraining, alternative employment, voluntary redundancies, short time working and restrictions on overtime). You should ask for suggestions to avoid redundancies, explain what the pools are and the proposed selection criteria and explain the right to take time off to seek alternative employment.
What about individual consultation meetings?
Once potentially redundant individuals have been identified after the scoring exercise, a meeting should be held with each of them individually to consult about their scores, the proposal to select for redundancy and what they are likely to receive as a redundancy package. Comments from the employee should be considered and a discussion had about details of any alternative roles within the company or an associated company.
Where there are no union or employee representatives, what happens where collective consultation is required?
You must arrange elections so that the employees can nominate and elect representatives. If representatives are not nominated or elected, consultation takes place with the employees personally.
What documents will be required?
In addition to the HR1 Form, you will need the following:
- the selection scoring matrix
- a script of the announcement made at the outset
- documents for the election of representative (if appropriate)
- a letter to all staff confirming what was said in the general announcement
- a letter under section 188 of the Trade Union Law Reform (Consolation) Act 1992 to the union or employee representatives (if relevant)
- letters inviting employee representatives to meetings if relevant
- follow-up letters after meetings with employee representatives summarising what was said
- a set of FAQs which could be useful for representatives to refer to and this can be expanded and revised as the consultation develops
- letters inviting employees to individual consultation meetings
- follow-up letters to confirm what was said at individual consultation meetings
- dismissal letters confirming redundancy dismissals and confirming right to appeal
- letters to individuals to appeal meetings
- minutes of all meetings
How many consultation meetings are required for each individual?
There is no set number, but proper consultation can take place in as little as two to three meetings provided a reasonable period is allowed between meetings for consideration to alternatives to redundancy.
Do we have to allow employees to be accompanied in individual consultation?
It’s good practice to do so but the law requires an employee to be accompanied by a trade union official or a work colleague where a meeting may result in dismissal, in other words, at the final consultation meeting. You should allow employees to be accompanied at any appeal hearing.
What risks are there in the process?
Using an incorrect pool or an unfair method of selection or unfair process of consultation can expose the company to claims for unfair dismissal by those employees who have more than two years of continuous service.