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EMPLOYEES’
INFORMATION AND CONSULTATION RIGHTS ON COLLECTIVE REDUNDANCIES
AND TRANSFERS OF UNDERTAKINGS
A
Short Guide to the New Requirements — URN 99/1036
More detailed
guidance is available from Redundancy
consultation and notification (PL833) and Employment
rights on the transfer of an undertaking (PL699).
If you have
any queries that are not answered by these leaflets, please telephone
020 7215 5985 for further assistance.
How has the
law changed?
Employers
have long been obliged by law to inform and consult employee representatives
over planned collective redundancies and transfers of undertakings.
The detailed
requirements have now been revised to make them clearer and
easier to understand and comply with.
The new requirements
came into effect on 28 July 1999. They apply where the collective
redundancy dismissals take effect or the transfer of undertaking
in question is completed on or after 1 November 1999.
What are
the main changes?
The main changes
are:
- if employees
who may be affected are represented by an independent trade
union recognised for collective bargaining purposes, that union
now has an automatic right to be informed and consulted over
collective redundancies and transfers of undertakings; it may
no longer be bypassed by the employer in favour of other employee
representatives;
- clear explicit
rules have now been introduced for the election of appropriate
employee representatives in non-union cases;
- it has
now been established that in non-union cases where affected
employees fail to elect representatives, having had a genuine
opportunity to do so, the employers concerned may fulfil their
obligations by providing relevant information to those employees
direct;
- non-union
representatives now have a right to reasonable paid time off
for relevant training, and it has been made clear that union
officials also have such a right under pre-existing provisions;
- employees
have new protection against being unfairly dismissed or detrimentally
treated for taking part in an election of employee representatives;
- the amounts
of compensation that employers may be required to pay in cases
of non-compliance have been increased and rationalised; and
- a number
of minor and technical inconsistencies between the provisions
in relation to collective redundancies and those in relation
to transfers of undertakings have been removed, further simplifying
and clarifying the legislation.
Who must
be informed and consulted?
Where there
is a recognised independent trade union representing employees
who may be affected by a planned collective redundancy or transfer
of an undertaking, the employer must inform and consult that union.
The employer is not required to inform and consult any other employee
representatives, but may do so voluntarily if desired.
Where there
are employees who may be affected by a planned collective redundancy
or transfer of an undertaking but who are not represented by a
recognised trade union, the employer must inform and consult other
appropriate representatives of those employees. These may be either
existing representatives (provided that their remit and method
of election or appointment gives them suitable authority from
the employees concerned), or new ones specially elected for the
purpose.
A collective
redundancy is one where 20 or more employees are to be dismissed
as redundant within a 90-day period. Employers are under no legal
obligation to inform and consult employee representatives in cases
falling below that threshold. They may, however, be at risk of
successful unfair dismissal claims if they fail to inform and
consult individual employees who are to be dismissed.
Employees
may be affected by a planned collective redundancy or transfer
of an undertaking even though they themselves are not to be made
redundant or to move to a new employer. In the event of a dispute,
whether or not any particular employee or class of employees was
affected would be for an employment tribunal to decide in the
light of all the facts.
What are
the new election rules applying in non-union cases where employee
representatives are specially elected?
The new rules
are:
a). The
employer shall make such arrangements as are reasonably practical
to ensure that the election is fair.
b).The
employer shall determine the number of representatives to be
elected so that there are sufficient representatives to represent
the interests of all the affected employees, having regard to
the number and classes of those employees.
c). The
employer shall determine whether the affected employees should
be represented either by representatives of all the affected
employees or by representatives of particular classes of those
employees.
d). Before
the election the employer shall determine the term of office
as employee representatives so that it is of sufficient length
to enable relevant information to be given and consultations
to be completed.
e). The
candidates for election as employee representatives are affected
employees on the date of the election.
f). No
affected employee is unreasonably excluded from standing for
election.
g) All
affected employees on the date of the election are entitled
to vote for employee representatives.
h). The
employees entitled to vote may vote for as many candidates as
there are representatives to be elected to represent them; or,
if there are to be representatives for particular classes of
employees, for as many candidates as there are representatives
to be elected to represent their particular class of employee.
i). The
election is conducted so as to secure that:
- so far
as is reasonably practicable, those voting do so in secret,
and
- the votes
given at the election are accurately counted.
Where an employee
representative is elected in accordance with these rules but subsequently
ceases to act as such and, in consequence, certain employees are
no longer represented, another election should be held satisfying
the rules set out at (a), (e), (f) and (i) above.
What are
the maximum amounts of compensation that can now be awarded by
employment tribunals in cases where employers have failed to comply
with the requirements?
The maximum
amount of compensation that a tribunal can award in the event
of an employer’s failure properly to inform and consult has been
increased in some cases, so that in all cases involving collective
redundancies it is now 90 days’ pay and in cases involving transfers
of undertakings it is now 13 weeks’ pay.
It remains
the position that in cases involving both collective redundancies
and transfers of undertakings a separate award may be made in
relation to each, with no provision for one to be offset against
the other
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