Quick view: Collective redundancy consultation (UK)

The collective consultation requirement applies when there are plans for at least 20 redundancies at a single establishment.

The leading case of USDAW and another v Ethel Austin Ltd (in administration) and others, which was considered by the UK Court of Appeal as well as the European Court of Justice, clarified that when considering whether employees are / were employed at a separate ‘establishment’, employers should consider the unit to which employees are assigned to carry out their duties, and that in order to be an establishment the unit does not need to have an independent management structure or separate legal status. For example, a national retailer is likely to be able to treat separate stores as separate establishments for the purposes of collective redundancy consultation.

Employers should ensure that any proposed redundancies are taken into account when considering this requirement, including:

• separate redundancy processes taking place within the same establishment;
• voluntary redundancies;
• non-renewal of fixed term contracts; and
• employees who will be made redundant but may be offered alternative roles.

Employers must fill in a Form HR1 and provide it to the RPS within the following timescales:

• 20 to 99 redundancies – 30 days before the first redundancy; and
• 100 or more redundancies – 45 days before the first redundancy.

If there is a recognised trade union representing the employees facing redundancy, the employer must consult with the trade union representatives during collective consultation. If there is no recognised trade union, the employer must:

• check whether there are existing employee representatives due to an information and consultation agreement; or
• if there are no existing employee representatives, arrange for an election process for employee representatives.

Section 188A of TULRCA sets out the following requirements for the election of employee representatives:

1. the employer must make such arrangements as are reasonably practical to ensure that the election is fair;
2. the employer must determine the number of representatives to be elected so that there are sufficient representatives to represent the interests of all the potentially redundant employees (affected employees);
3. the employer must determine whether the affected employees should be represented either by representatives of all the affected employees or by representatives of particular groups of those employees (eg, employees in different roles);
4. before the election the employer must determine the term of office for the employee representatives, ensuring that it is of sufficient length to enable information to be given and consultations under section 188 to be completed;
5. the candidates for election as employee representatives must be affected employees on the date of the election;
6. no affected employee may be unreasonably excluded from standing for election;
7. all affected employees on the date of the election must be entitled to vote for employee representatives;
8. the employees entitled to vote may vote for as many candidates as there are representatives to be elected to represent them or, if there are to be representatives for particular classes of employees, may vote for as many candidates as there are representatives to be elected to represent their particular class of employee;
9. the election is conducted so as to secure that:
   1. so far as is reasonably practicable, those voting do so in secret; and
   2. the votes given at the election are accurately counted.

The employer must provide the employee representatives with the information set out in section 188(4) of TULRCA. This is known as a section 188 letter and must include:

1. the reasons for the redundancy proposals;
2. the numbers and descriptions of employees whom it is proposed to dismiss as redundant;
3. the total number of employees of any such description employed by the employer at the establishment in question;
4. the proposed method of selecting the employees who may be dismissed;
5. the proposed method of carrying out the dismissals, including the period over which the dismissals are to take effect;
6. the proposed method of calculating the amount of any redundancy payments to be made to employees who may be dismissed;
7. the number of agency workers working temporarily for and under the supervision and direction of the employer;
8. the parts of the employer’s undertaking in which those agency workers are working; and
9. the type of work those agency workers are carrying out.

Section 188(2) of TULRCA requires employers to consult with employee representatives about ways of:

1. avoiding the dismissals,
2. reducing the numbers of employees to be dismissed, and
3. mitigating the consequences of the dismissals.

It also provides that consultation ‘shall be undertaken by the employer with a view to reaching agreement with the appropriate representatives’.

In practice, it will be necessary for an employer to meet with the employee representatives as a group a number of times during the consultation period, and allow the representatives an opportunity to feed back information to the affected employees and from the affected employees to the employer. The number of meetings required will vary depending on the circumstances. Key topics to be covered during collective consultation meetings include:

• measures to avoid or mitigate compulsory redundancies – these might include offering voluntary redundancy or agreeing reduced hours;
• selection criteria;
• suitable alternative employment and redeployment options; and
• redundancy pay and other entitlements.

Employers should ensure that open, honest and meaningful conversations take place with employee representatives, and that any suggestions put forward by the employee representatives are given serious consideration by the employer. Failure to do so could lead to allegations that the consultation process was a sham.