REDUNDANCY
CONSULTATION AND NOTIFICATION (PL833 Rev 6)
Introduction
This document gives general information about the statutory
redundancy consultation and notification provisions contained in Part IV of the
Trade Union and Labour Relations (Consolidation) Act 1992, as amended by the
Trade Union Reform and Employment Rights Act 1993, the Collective Redundancies
and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations
1995 (SI 1995 No. 2587) and the Collective Redundancies and Transfer of
Undertakings (Protection of Employment) (Amendment) Regulations 1999 (SI 1999
No. 1925). These provisions implement the EC Collective Redundancies Directive
(98/59/EC).
NOTE: The latest Regulations mentioned above come into force
on 28 July 1999 and apply where collective redundancy dismissals are to take
effect on or after 1 November 1999. For information about the provisions
applying before those dates, please see the previous edition of this document.
The Department of Trade and Industry’s Redundancy Payments
Service (RPS) administers the notification provisions and can give more
information. The address to contact is:
Birmingham Redundancy Payments Office
7th Floor, Hagley House,
83-85 Hagley Road,
Birmingham B16 8QG.
Their Helpline is on 0845 145 0004
The Advisory, Conciliation and Arbitration Service
(Acas) can
help with queries about informing and consulting employee representatives.
Introduction
An employer is required to inform and consult appropriate
representatives of employees who may be affected by proposed collective
redundancy dismissals, or by measures taken in connection with them. The
employer is also required to notify the Department of Trade and Industry of the
proposed dismissals. A collective redundancy situation arises where the employer
proposes to dismiss as redundant at least twenty employees at one establishment
within a ninety day period.
Who is covered by the provisions?
The provisions apply to all employers and employees except
those described below. They apply regardless of how long employees have worked
for their employer or for how many hours a week they are employed.
Who is not covered by the provisions?
The provisions do not cover:
- anyone who is not an employee - for example, an independent
contractor or freelance agent;
- members of the police service and armed forces;
- masters and crew members engaged in share fishing who are
paid solely by a share in the profits or gross earnings of a fishing vessel;
- Crown servants and Parliamentary staff;
- employees employed for a fixed term of three months or
less, or engaged for a specific task which is not expected to last more than
three months, unless in either case the job lasts for more than three
months.
What is a collective redundancy situation?
A collective redundancy situation arises where an employer
proposes to dismiss twenty or more employees as redundant within a ninety day
period. For these purposes, the definition of "redundancy" differs
slightly from the one used to establish entitlement to statutory redundancy
payments. It means a dismissal for a reason unrelated to the individual employee
concerned. This might occur, for example, where a business or plant closes down,
or where an employer no longer needs as many employees to carry out a particular
task. It might also occur where dismissals are to take place in a reorganisation
or reallocation of work, but where there is no overall reduction in the number
employed because the employer is taking on new recruits.
Employers are under no specific legal obligation to inform and
consult employee representatives in cases falling below the twenty redundancy
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.
Employers may therefore also wish to see the documents Unfairly Dismissed?
(PL712) and Dismissal - fair and unfair: a guide for employers
(PL714).
Who must be informed and consulted?
Where employees who may be affected by the proposed
dismissals, or by measures taken in connection with them, are represented by an
independent trade union recognised for collective bargaining purposes, the
employer must inform and consult an authorised official of that union.
This may be a shop steward or a district union official or, if appropriate, a
national or regional official. The employer is not required to inform and
consult any other employee representatives in such circumstances, but may do so
voluntarily if desired. A trade union may be recognised for one group of
employees, but not for another.
Where employees who may be affected by the proposed
dismissals, or by measures taken in connection with them, are not
represented by a trade union as described above, the employer must inform and
consult other appropriate representatives of those employees. These may be
either existing representatives or new ones specially elected for the purpose.
It is the employer’s responsibility to ensure that consultation is offered to
appropriate representatives. If they are to be existing representatives, their
remit and method of election or appointment must give them suitable authority
from the employees concerned. For example, where redundancies are to take place
amongst, say, sales staff, it would clearly not be sufficient for the employer
to inform and consult a committee of managers set up to consider the operation
of a staff canteen; but it might well be appropriate to inform and consult a
fairly elected or appointed committee of employees, such as a works council,
that is regularly informed or consulted more generally about the business’s
financial position and personnel matters. If the representatives are to be
specially elected ones, certain election conditions must be met. These are
described below.
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.
Employees may be affected by the proposed dismissals, or by
measures taken in connection with them, even though they themselves are not to
be dismissed. 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. (For further details, see
both sections Redress in cases where employers have failed to meet their information
and consultation obligations and Complaints to employment tribunals
of
this document).
What are the election rules applying in cases where
employee representatives are to be specially elected?
The 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.
Is there any minimum period for consultation?
Unless prevented by special circumstances (see below), the
employer must begin the process of consultation in good time and in any event at
least:
- thirty days before the first of the dismissals takes effect
in a case where between twenty and ninety-nine redundancy dismissals are
proposed at one establishment within a ninety day period;
- ninety days before the first of the dismissals takes effect
in a case where one hundred or more redundancy dismissals are proposed at one
establishment within a ninety day period.
An employer who has already begun consultations about one
group of proposed redundancy dismissals and later finds it necessary to make a
further group redundant does not have to add the numbers of employees together to
calculate the minimum period for either group.
In a case where employee representatives are to be specially
elected, the employer will need to ensure that the election is completed and the
representatives are in place (having had an opportunity for appropriate training
if necessary) in time to allow for the minimum period for consultation to be
met.
Individual periods of notice
Individual notices of dismissal should not normally be issued
to employees in a collective redundancy situation until there has been
sufficient meaningful consultation in accordance with these statutory
requirements. Subject to this, however, the individual periods of notice may run
concurrently with the statutory consultation period.
What information must be disclosed?
The employee representatives will need enough information
about the employer’s proposals to be able to take a useful and constructive
part in the process of consultation. An employer must therefore disclose certain
information in writing. This must be:
- handed to each of the appropriate representatives; or
- an address notified to the employer; or
- in the case of a trade union, to the address of the
union’s head or main office.
The employer must disclose:
- the reasons for the proposals;
- the numbers and descriptions of employees it is proposed to
dismiss as redundant;
- the total number of employees of any such description
employed by the employer at the establishment in question;
- the proposed method of selecting the employees who may be
dismissed;
- the proposed method of carrying out the dismissals, taking
account of any agreed procedure, including the period over which the
dismissals are to take effect;
- the proposed method of calculating any redundancy payments,
other than those required by statute, that the employer proposes to make.
Scope of consultation
The consultation is to include ways of avoiding the redundancy
situation or dismissals, or of reducing the number of dismissals involved and
mitigating the effects of the dismissals. The legislation does not require
agreement to be reached but the employer must consult in good faith with a view
to reaching agreement.
Special circumstances
There may be special circumstances where it is not reasonably
practicable for an employer to meet fully the requirements for minimum
consultation periods or disclosure of information. In such circumstances,
employers must do all that is reasonably practicable toward meeting the
requirements.
It does not count as ‘special circumstances’ for
these purposes if the decision leading to the redundancies was taken by a
controlling body (e.g. a head office or parent company) that had not supplied
the necessary information or had not supplied it in time.
Stock Exchange rules
Stock Exchange rules do not preclude employee
representatives being informed and consulted in advance where collective
redundancies are planned in connection with a restructuring (eg a plant closure
or a takeover) which may involve price sensitive information. Provision
can be made for employee representatives to be subject to confidentiality
constraints for a specified period, but at the same time be sufficiently
informed to hold meaningful consultations with the employer.
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