Employees’ information and consultation rights on collective redundancies and transfers of undertakings

URN No: 99/1036

A Short Guide to the New Requirements

More detailed guidance is available from 

Redundancy consultation and notification: guidanceand  Employment rights on the transfer of an undertaking: a guide to the 2006 TUPE regulations for employees, employers and representatives
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.