What’s the risk if your collective consultation is flawed?

What's the risk if your collective consultation is flawed? We are asking the question, because, given the pandemic, many businesses are having to make decisions quickly, without the usual time to prepare management for the procedures they need to follow and we are seeing mistakes. We are referring to the procedures governing how you handle mass redundancies, and major changes to terms and conditions such as pay cuts and the like. The law governing what needs to happen is of course, section 188 of the 1992 Trade Union and Labour Relations (Consolidation) Act. A reminder, the duty is triggered when an employer proposes to dismiss as redundant 20 or more employees at one establishment within 90 days or less. The consultation has to begin “in good time” and whilst there’s no time limit for how long the period of consultation should be, there are minimum time periods specified. So for 20 to 99 redundancies - the consultation must start at least 30 days before any dismissals take effect. For 100 or more, it must start at least 45 days before any dismissals take effect. Ireland is a little different and we’ll come onto that shortly.

In the last couple of weeks our Head of Client training Trish Embley has been talking to this programme about how HR can support managers in carrying out their section 188 duties and she has flagged a number of pitfalls which inexperienced managers can fall into. When that happens, and the duty is breached, it is potentially serious and very costly. To explain, Trish Embley again, joining me by video-link from Birmingham:

Trish Embley: “If collective consultation isn't carried out properly, the legal risk is that the employee reps will bring a claim on behalf of the employees they represent for a protective award. Now, the stakes quite high, because all of the employees they represent could end up being awarded 90 days gross actual pay, so you can imagine in large scale redundancies this could be quite a bill. That 90 days it is a maximum award so we always say to clients do your best, just give the information you can give, do what you can do, because a tribunal might come to a view that, okay, you provided a certain amount information, we think you should have given a bit more, or should have given a bit more time, but they might not award a full 90 days, they might say, oh, you know, a week, a week's pay, so you can really mitigate how bad are those claims can be. Of course, I guess we should mention, apart from legal claims, we've got to think about employee relations, you got to think about the people who remain within the organisation, what they think about the way you've carried out this exercise and how you've treated people as they've been, sadly, leaving the organisation. So the things that you might face a claim on would be based on a failure to give enough information or not to allow enough time for proper consultation to be carried out and it's important to bear in mind that the time limits are minimum time limits. So where we're making 20 or more redundancies at an establishment, but less than 100, that would be 30 days minimum. If it's over 100 at an establishment if it is in England, Scotland and Wales 45 days, and in Northern Ireland 90 days, but you might want to take advice as to whether or not in particularly complicated circumstances you want to allow even a little bit more time than that to make sure that you can't be accused of not allowing sufficient time for consultation. So as I say, I think the key to it is how the employee reps feel they've been treated. As with most tribunal claims, sometimes people basis on the law, sometimes people base it on a sense of grievance that that sends them off to their lawyers to say this just didn't feel fair, and so it's again this feeling that no matter how bad the news is and, even if as a rep, I feel we didn't get what we wanted, but you know what, I feel that they were honest from the start, they were transparent, there was nothing hidden and they just treated the people I represent with some respect. So I think if we remember those key things, bit of the legal bit of the humane, then we will avoid protective awards because as I'm sure many of our clients are aware it's not necessarily just winning or losing, we don't want to lose, but it's having the claim in the first place that’s the real problem.”

Joe Glavina: “Can I ask you about the 'special circumstances' defence, Trish. Arguably in a pandemic when employers are having to do all this remotely there would appear to be some scope for pointing to that as an excuse for failing to comply with section 188?

Trish Embley: “I think the special circumstances defence exempts employers from collective consultation is so hard to argue. If you look at case law, the circumstances in which it is engaged have to be so extreme. I mean literally things like the whole business burnt down and everyone's redundant, we didn't have any chance, and I think in these days where we do have some form of technology, whether it's mobile phones, computers, whether we just spend a bit more time on using old fashioned things like the post. So to say consultation was impossible is an extremely high bar and I would not be advising clients to rely on it purely because of the circumstances we find ourselves in with this pandemic”.

In case you missed them, both of last week’s programmes featuring Trish are available now for viewing on the Outlaw website. They cover the training up of managers to be able to undertake the consultation exercise and front up to the employees affected, and the reps. If you would like further details on this type of training we would be happy to provide it for you. Trish Embley’s details are there on screen for you, or you can hit the ‘Make an Enquiry’ tab on the Outlaw website.