Redundancy during Coronavirus: Part 3: How do I consult with employees who are risk of redundancy?
In Parts 1 and 2 of our series of blogs we looked at when a redundancy situation might arise, gave an overview of both individual consultation and collective consultation and how to fairly select those employees who will be at risk from redundancy should be selected. in Part 3 we explain how employers conduct a redundancy consultation with those employees at risk of redundancy.
Why consult at all?
The aim of consultation is to provide employees at risk with a way to influence the redundancy process and potentially the outcome, for example, employees on being informed of the selection may make a convincing argument that it should be widened or make suggestions that could reduce the number or impact of redundancies. Ideally, the outcome of the consultation will be an agreement between the employer and employees (or their trade or employee representatives in the case of collective consultation) about any action to be taken but, if agreement cannot be reached, at the very least, it should be conducted in a way that ensures the employees (or their representatives) understand what is being proposed and why, their views have been heard and they understand why the proposed redundancies have been implemented.
Without consulting, or without conducting a meaningful or genuine consultation, any subsequent dismissal by reason of redundancy, is likely to be unfair.
How does an employer conduct a consultation?
The employer first has to know with whom it is consulting and that depends on whether the employer is conducting collective consultation and/or individual consultation.
If an employer recognises a trade union it should collectively consult with trade union representatives. An employer that consults with a trade union is not required to collectively consult with anybody else. Where a trade union is not recognised (or the employees work in a part of the business that is not represented by a recognised trade union), the employer should make necessary arrangements to allow the employees to elect employee representatives. This is unless there are existing employee representatives, for example, a competent employees’ work council with authority to represent the employees. These employee representatives will consult with the employees on their behalf in much the same way trade union representatives would.
The consultation begins with providing specific information in writing to the representatives including the number of, and the reasons for the, proposed redundancies, details of the selection criteria and how redundancy payments are calculated. In the minimum consultation period that then follows (a 30-day or 45-day period depending on the number of proposed redundancies in a 90-day period), topics that should be covered include:
- the reasons for redundancies;
- ways to avoid redundancies;
- how to keep the number of redundancy dismissals to a minimum; and
- how to limit the effects on those dismissed.
Employers should always consult individually those employees who have been provisionally selected for redundancy and will normally include the same topics for discussion as collective redundancy as well as each employees’ score (giving them an opportunity to challenge their own score), redundancy payments and suitable alternative employment which employers have a duty to identify and, if available, offer.
It is important to distinguish between alternative employment and suitable alternative employment. If an employee rejects the offer of the former he or she does not lose the right to a statutory redundancy payment, however, if he or she unreasonably rejects the offer of the latter, the employee will no longer be entitled to a redundancy payment. Whether an employee has reasonably rejected an offer of suitable alternative employment will depend on factors including how and when the offer was made by the employer meaning an employer should ensure that this issue is properly discussed and considered during the consultation.
How long should the consultation last?
A collective redundancy must begin “in good time” before any dismissal is proposed to take effect and it should take as long as is necessary, always ensuring that it lasts at least the minimum 30-day or 45-day period required. Notice of dismissal cannot be given until after the consultation has been completed.
There may be occasions when a meaningful collective consultation is genuinely completed within the minimum consultation period in which case, an employer can give notice of dismissal before it comes to an end but the last day of employment cannot fall before that minimum period. There may also be special circumstances where it is not reasonably practical to consult fully or at all but an employer must still do everything it can to ensure that there is a consultation and it is as full as possible. Advice should always be taken if an employer is contemplating relying on ‘special circumstances’ to short circuit collective consultation.
Individual consultation should also take as long as is necessary but the 30-day or 45-day rule does not apply. Instead, an employer should aim to consult over at least a 7-day period.
What happens if an employer does not consult?
Consultation is fundamental to a fair redundancy process.
Where there has been a failure to conduct a proper collective consultation, an employee or his or her representative can make a claim to the Employment Tribunal for a ‘protective award’. This might because the consultation did not start early enough, it ended too early or the consultation was not meaningful or genuine. A protective award is up to 90 days’ pay for each affected employee.
In addition, even where collective consultation has taken place, there is a separate duty to consult individually with each employee at risk. A failure to consult can lead to a compensatory award for a successful unfair dismissal claim.
The intricacies of redundancy consultation are complex, particularly given the recent lockdown. It is far preferable (and cheaper) for employers to take advice before they start consulting, rather than during or after consultation has concluded.
If in doubt, take advice from Blackadders’ Employment Team.
Donna Reynolds, Partner
Accredited by the Law Society of Scotland as a Specialist in Employment Law & Discrimination Law
In this section
- Scottish Government: Sector Guidance for Easing Lockdown, 26 May 2020
- Scottish Government: COVID-19 Funding Plea, 23 May 2020
- Scottish Government: Expansion of COVID-19 Testing, 18 May 2020
- Data Protection and Privacy During the Coronavirus Pandemic
- Scottish Government: Second Coronavirus (Scotland) Bill, 11 May 2020
- Scottish Government: SME Support Doubles to £90 million, 8 May 2020
- Redundancy during Coronavirus Part 4: How do I calculate redundancy payments?
- Redundancy during Coronavirus: Part 3: How do I consult with employees who are risk of redundancy?
- Scottish Government: Emergency Loan Fund for SME House Builders, 7 May 2020
- UK Government: Business Rates Revaluation Postponed, 6 May 2020
- Scottish Government: New Powers over CAP, 5 May 2020
- Scottish Government: Preparing for Economic Recovery, 5 May 2020
- Uk Government: Self Employed Invited to Get Ready to Make Their Claims for COVID-19 Support, 4 May 2020
- UK Governement: Funding five new testing facilities in Scotland, including Perth, 29 April 2020
- Scottish Government: Rapid Coronavirus Research. More than 50 Scottish Studies to Tackle Virus and its Impact, 28 April 2020
- Scottish Government: Securing Vital COVID-19 Supplies for Scotland, 24 April 2020
- Coronavirus Business Interruption Loan Scheme Update and New Support for Smaller Businesses
- Aberdein Considine: View the latest response to Coronavarius
- Redundancy During Coronavirus: Part 2: How Do I Select Employees for Redundancy? 23 April 2020
- Scottish Government: Lifeline Support for Business Confirmed, 21 April 2020
- Scottish Government: Universal Credit. People Being Urged To Access All Support, 21 April 2020
- Scottish Government: COVID-19 Impact on Scotland's Economy, 21 April 2020
- Redundancy During Coronavirus: Part 1: How Do I Deal With Collective Consultation?, 21 April 2020
- Scottish Government: Call for Accelerated Business Support, 21 April 2020
- UK Government: Billion £ Support Package for Innovative Firms hit by COVID-19, 20 April 2020
- Scottish Government: Extend Brexit Transition during COVID-19 crisis, 20 April 2020
- Scottish Government: Advisory Group on Economic Recovery, 17 April 2020
- Scottish Government: Thousands of Businesses Benefit from Support Grants, 17 April 2020
- UK Government: Chancellor extends furlough scheme to end of June, 17 April 2020
- What Coronavirus Act means for Commerical Landlords
- UK Government: Universal Credit claimants to verify identity through Government Gateway, 16 April 2020
- UK Government: Councils given greater financial relief against cash flow pressures, 16 April 2020
- Scottish Government: Additional Support for Business, including additional £100m for Self-Employed, 15 April 2020
- UK Government: Magnox donates 66,000 items of PPE to support coronavirus response, 15 April 2020
- UK Government: Furlough scheme cut-off date extended to 19 March, 15 April 2020
- UK Government: Job Retention Scheme, 15 April 2020
- Scottish Government: New Mental Health Support, 14 April 2020
- UK Government Response: Commission on Human Medicines: Advice on Ibuprofen and Coronavirus, 14 April 2020
- Scottish Government: National Helpline to Support Those at High COVID-19 Risk, 13 April 2020
- UK Government: Scottish Secretary Welcomes Additional Money to Help Scotland Tackle Coronavirus, 13 April 2020
- Scottish Government: Transport Community to Help COVID-19 Sufferers, 12 April 2020
- Scottish Government: New Measures to Protect Business Tenants, 10 April 2020.
- Scottish Chamber of Commerce: COVID-19 Update
- Scottish Government: Skills matching service to help rural business. 09.04.20
- Scottish Government: Additional COVID-19 Daily Data Published 08.04.20
- UK Government: Coronavirus (COVID-19): letter to the manufacturing sector 08.04.20
- UK Government: Letter from the Secretary of State for Business, Energy and Industrial Strategy, Alok Sharma, to those working in retail. 08.04.20
- Scottish Business Community calls for clarity, consistency and cooperation in COVID-19 response 3 April 2020
- Help find new ways too ease global disruption: apply for funding. 3 April 2020
- UK Export Finance to offer export insurance in all major markets in response to Coronavirus (COVID-19). 3 April 2020
- Chancellor strengthens support on offer for business as first government-backed loans reach firms in need
- Scottish Business Community calls for clarity, consistency and cooperation in COVID-19 response. 3 April 2020
- Scottish Govenment Help with non-domestic rates in Scotland during coronavirus (COVID-19) Last updated: 2 April 2020
- Coronavirus: Rishi Sunak announcement on UK government aid for self-employed
- UK Government Self-employment and Universal Credit
- Scottish Government Coronavirus (COVID-19): business and social distancing guidance. Published 25.03.20
- Scottish Government Coronavirus (COVID-19): guidance for businesses on offering support. Published 24 March 2020
- 20th March Update
- SCC & Scottish Government Update 18th March
- SCC & Scottish Government Update 17th March
- PKC Coronavirus (Covid-19) Guidance
- UK Government Coronavirus (Covid-19) Link
- Scottish Government Corona Virus (Covid-19) Link
- NEW Find Business Support in response to Coronavirus - from Scottish Enterprise Source
- Coronavirus: £320m rescue package for business from Scottish government - BBC Sourced
- Guidance & Quick Links
- Helpline announed by Fiona Hyslop, Economy Secretary - Sunday 15th March 2020