With COVID-19 taking its toll on some businesses, employees may find themselves placed at risk of redundancy. This article looks at the practical steps an employer should take when carrying out an individual redundancy consultation.
Individual consultation is fundamental to the fairness of any dismissal for redundancy. Even if there is a genuine redundancy situation, an employment tribunal will look at whether the employer acted reasonably in reaching the decision to dismiss when deciding if the dismissal was fair or unfair. Successful consultation requires the employer having an open mind and being able to discuss and consider the subject matter of consultation. If the employer has already made a decision, there will be nothing to consult on, making the process a sham exercise.
There are no set timescales within which individual consultation should take place. However, the shorter the consultation period, the more likely an employment tribunal will question the fairness and quality of the consultation. Case law suggests that the bare minimum period for individual consultation is seven days but we would advise employers to consider a longer period to enhance their prospects of establishing the dismissal process as fair. If an affected employee is not consulted until late in the process, an employment tribunal may also question the adequacy of the consultation.
Practical steps when carrying out individual consultation
Case law has also provided guidelines that employers can follow to assist with demonstrating that they have acted reasonably when making the decision to dismiss an employee on grounds of redundancy.
An announcement should be made to all potentially affected employees as early as possible to explain the reasons for the redundancy proposals, the process to be followed (and whether any volunteers are requested) and the pool and method for proposed selection.
Employers should then hold an individual meeting with each potentially affected employee. In this meeting, the employer should explain that it is proposing changes within the business and if these are implemented, it could result in redundancies. The employer should also discuss the reasons for the proposed changes and the pool that has been chosen. It should be made clear to the employee that their role is potentially at risk and that the employer will consult with them about selection criteria and ways to avoid redundancies and/or mitigate the consequences of the redundancies. The employee should also be informed from when the proposed redundancies may take effect and any potential redundancy packages they may receive if redundancies cannot be avoided. A letter should be sent to the employee after the meeting confirming the points discussed.
The employee should be given time to consider the information received at the first meeting. The employee may ask for reasonable time off work to consider the consequences.
After the employee has had time to think, a second individual consultation meeting should be held with them. This meeting should be used to review the employee’s thoughts and views on the proposed pool and selection criteria and also any suggestions the employee may have on ways to avoid redundancies and/or mitigate the consequences. The employer may need to adjourn this meeting to consider the points raised by the employee and reconvene to respond to any of the points raised.
If no alternatives have been found, the employer should proceed with carrying out the selection process.
After the selection process has been completed, the employer should hold a third individual consultation meeting with the employee. During this meeting, the employer should confirm the outcome of the selection process, provide the employee with the opportunity to challenge their selection and respond to any suggestions made by the employee. The employer has a duty to look for alternative employment for the employee and this should be considered during this third meeting.
Before holding a final consultation meeting, the employer should review the redundancy process to date. This will include considering any further suggestions and points made by the employee in relation to alternative employment and any other concerns or suggestions the employee may have. The employer should take time to consider these and further meetings with the employee may be necessary in order to respond to these points. Once the consultation is completed, if no alternatives are found, the employer should invite the employee to a final meeting. The letter should confirm that no alternative has been identified and warn the employee that they may be given notice of dismissal at the final meeting. Ideally, the employee should be allowed to be accompanied by a colleague or trade union representative at this final meeting.
The employer should then hold the final meeting with the employee. The employer should reiterate the reasons for the redundancy proposals, address any final queries the employee may have, discuss any attempts to find alternative employment and in the absence of any further points and where no alternative is available, the employer should issue notice of termination to the employee. The employer will need to confirm to the employee the termination date, payments and the right of appeal. The contents of the meeting should be confirmed in writing to the employee. If the employee raises an appeal, this will need to be addressed by the employer as an additional step in the process.
Individual consultation v collective consultation
An employer must undertake individual consultation in all redundancy cases. However, where an employer proposes to make 20 or more employees redundant at one establishment over a period of 90 days or less, the employer has a duty to collectively consult those employees. This means that the employer should:
- provide appropriate employee representatives with certain specified information;
- consult appropriate employee representatives for a set period of time depending on how many employees are affected by the proposals; and
- notify the Secretary of State.
This article has focused on individual consultation rather than collective consultation but as set out above, an employer will need to individually consult in both types of redundancy situations. Employers will need to ensure that they have followed a fair procedure in relation to the affected employees, including consulting with them properly as per the guidelines in this article. By doing this, employers will minimise the risk of claims of unfair dismissal being successfully brought against them following a redundancy situation.