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Temporary workers and collective redundancy: don't fall foul of the law!

05 March 2008

Temporary workers are often used in the retail sector to plug the labour gap over busy trading periods but retailers could be inadvertently breaching collective redundancy law when the temps are no longer needed.

Where an employer is proposing to dismiss as redundant 20 or more employees within a period of 90 days or less, they must consult with the representatives of affected employees about the proposed dismissals. The law in relation to collective redundancy consultation gives a wider meaning to “redundancy” than the commonly understood definition.

For collective consultation purposes “redundancy” has a very wide meaning and includes any dismissal which is not for a reason connected to the individual. A “dismissal” would include the expiry of a fixed term contract. The only exception to this requirement is in relation to employees who are employed for a fixed-term of three months or less, provided they have not worked for more than three months continuously.

An employer who does not consult faces a potential Employment Tribunal claim and the prospect of a protective award being made against it. A protective award can be up to 90 days’ actual pay per employee. This is a penal award, if there is no attempt made to consult it is likely that the full 90 day award will be made. If just one employee brings such a claim it is open to the Employment Tribunal to make the protective award on behalf of all affected employees.

In order to avoid the risk of a claim where consultation is not a practical option, all temporary employees should be employed for no more than a three month period. However, it may sometimes be necessary to employ employees for more than three months (e.g. over the Christmas and New Year sales period). In this case the risks may be ameliorated by ensuring that no more than 20 temporary staff are taken on at any one store as the duty to consult does not arise where less than 20 employees may be made redundant at any single “establishment”.

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Helen Jess

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