We are currently running a series of programmes based around frequently asked questions and the current topic is redundancy. As you’ll be aware these are difficult times for many businesses with many looking at ways to cut costs through restructuring, and/or reorganisation. If that results in redundancies, and you’re making 20 or more employees redundant within any 90-day period at a single establishment, then the collective redundancy consultation rules are triggered – very important, with significant penalties for a failure to comply with them.
This is a major exercise with a timeline laid down by the legislation which employers need to comply with. So, at what point does HR need to start planning for this? It’s a question we are often asked. On the line from Aberdeen to help with that, Claire Scott:
Claire Scott: “I always say to clients that it's really important to do planning right from the outset where there's the possibility of a collective redundancy. So, the first thing I would always advise clients is to ensure that they have a tracker to work out what their numbers are for potential redundancies at one establishment because the rule is that you have to collectively consult when there are 20 or more redundancies at one establishment within a rolling 90 day period. So you need to count those up because you can sometimes inadvertently reach the 20 or more by a series of individual redundancies, and maybe a bigger group of redundancies. In addition, things like a settlement agreement can sometimes count to your numbers if it's for redundancy reason and, also, in addition, changing terms and conditions where you might have a dismissal and re-engagement that can also count to the numbers so it's really important that you have a tracker at the outset so you know when the collective redundancy rules may apply. That's the first thing I would always say. The second thing I always mention to clients, and I was talking about it recently to a client, is that it's really important to plan a timeline and I think what a lot of our clients sometimes forget when they are looking at planning for business change, they forget to bring HR in at an early point and I always say to clients it's really important to bring HR in at an early point before a proposal to make redundancies is properly formed. That’s because managing a collective redundancy process can take a lot of time in the planning and often once a proposal to dismiss is made, the matter is urgent, and then HR are running around trying to work out how to fit quite a lengthy process into a very short period of time. So, it's really important for management to bring HR in at an earlier point so that they can plan in case you've got collective redundancies to make. An example of that would be where you have to consider election of representatives because as part of the collective redundancy rules you have to consult with elected representatives. Now that might be trade union representatives, if you've got a recognised trade union in that area of the business, however, most employers will have to elect employee reps either to sit alongside trade union reps or in place of them and there is a particular process under the law, you have to follow it, and you have to build it into your timetable so it’s really important that HR are brought in for things like that. I had a client the other day who was who had gone through the election of representatives and didn't get any representatives, nobody wanted to do it, so they had to then go back to the beginning and improve their communications and really try and persuade people to stand and that all adds to the timeline. So, it's things like that. You’re dealing with people, in the end of the day, who are upset, and you've got to manage it sensitively and you've got to ensure that you're building in enough of the timeline in advance so that that can be done properly in accordance with the law and also with the needs of the employees at the centre of it. The collective redundancy rules are complicated and I think the key thing is to ensure that when you're looking at this, you're building it in with HR early and also allowing HR to take legal advice if required, because the stakes are high if you get it wrong. Protected protective awards of 90 days’ pay per affected employee can be made and that can really rack up, that's actual pay, you risk unfair dismissals and potential industrial action we've seen as well. So, really important to just plan ahead and get everything sorted out before that proposal to dismiss is made”.
We have added this programme to our FAQs series of programmes. To find them just type ‘FAQ/redundancy’ in the search engine of the Out-Law website.