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Collective redundancies

21 November 2005
Collective redundancies

This article first appeared on www.personneltoday.com, the website of Personnel Today magazine.

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Marc Jones, partner at Turbervilles, gives advice on legislation relating to collective redundancies

When can an employer carry out collective redundancies?

The European Court of Justice (ECJ) says that an employer is only entitled to carry out collective redundancies after concluding the consultation procedure.

Employers would be well advised to ensure they avoid giving notice of dismissal until consultation has been completed.

Who should be consulted?

Trade union representatives must be consulted if the union is independent and recognised to conduct collective bargaining. Otherwise, existing representatives (such as members of a works council) or employee representatives who were specifically elected to deal with consultation on the proposed redundancies may be consulted. The employer should also consult the individuals who may be selected for redundancy.

What should redundancy consultation be about?

Consultation must be undertaken ‘with a view to reaching agreement' and must cover ways of avoiding the dismissals, reducing the numbers to be dismissed and mitigating the consequences of the dismissals. Employers should not give staff notice of dismissal prior to the conclusion of consultations, as this might be taken as an indication that the consultations are a sham. This view is backed by the ECJ.

What must be disclosed before redundancy consultations?

The employer must disclose in writing:

  • the reasons for the proposed redundancies
  • the numbers and descriptions of staff proposed for redundancy
  • the total number of employees of those descriptions employed at the establishment in question
  • the proposed method of selecting those who may be dismissed
  • the proposed method of carrying out the dismissals, including the period over which the dismissals are to take effect
  • the proposed method of calculating any redundancy payments

What happens if an employer fails to comply?

If an employer fails to comply with the collective consultation procedures, affected staff may bring a complaint before an employment tribunal. If the tribunal finds the complaint well-founded, it will make a declaration to that effect and may make a protective award.

The award requires the employer to pay the employees remuneration for a protected period, which begins on the date when the first of the dismissals to which the complaint relates took place, and ends up to 90 days later. If an employer fails to consult on an individual basis, an affected employee may bring a complaint of unfair dismissal.

Further information

The law relating to redundancy is generally found in the Employment Rights Act 1996 http://www.hmso.gov.uk/acts/acts1996/1996018.htm as amended and the Trade Union and Labour Relations (Consolidation) Act 1992 http://www.hmso.gov.uk/acts/acts1992/Ukpga_19920052_en_1.htm

Marc Jones is a partner at Turbervilles

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