DAVID ROYDEN - EMPLOYMENT SOLICITOR
UK EMPLOYMENT LAW

David Royden is a Partner with Laytons Solicitors and Head of Employment Law, Manchester, UK

Laytons Solicitors is a national law practice specialising in all aspects of Company and Commercial Law

Laytons Solicitors, 22 St John Street, Manchester M3 4EB.
Tel: +44 (0) 161 834 2100
Fax: +44 (0) 161 834 6862

Offices at London, Manchester and Guildford, UK

ENQUIRY CONTACT FORM
PLEASE CLICK FOR FURTHER
INFORMATION AND ADVICE


EMPLOYMENT LAW UPDATES PLEASE CLICK HERE FOR LATEST NEWS AND CASE REVIEWS

 

back to home page

REDUNDANCY PROCEDURE

Employees are entitled to be consulted, through representatives, about proposed redundancies. However, employers should first consider whether there are any alternatives to redundancy and if so what these are. If there are no alternatives the following steps should be taken:

Consultation

  • Employers should decide on the number of employees to be made redundant and, if more than 20, must undertake collective consultation. The employer must consult “Appropriate Representatives” about collective redundancies where it is proposed to make 20 or more redundancies at one establishment within a period of 90 days or less.
  • “Appropriate Representatives” are either employee representatives elected by the employees or (if the employees are of a description in respect of which an independent trade union is recognised by the employer) representatives of that trade union.
  • If an employer does not recognise a trade union, then he must invite the employees to elect representatives to allow consultation to take place. The rules for the election of employee representatives are as follows:

    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.
  • The overriding requirement is that consultation must begin in “good time” but the legislation does lay down certain minimum periods for which the consultation must last. These are :-

    (a) if the proposal is to dismiss 100 or more employees at one establishment within a period of 90 days or less, the consultation must begin at least 90 days before the first dismissals take effect
    (B) otherwise, at least 30 days before the first dismissals take effect where 20-99 employees are to be dismissed

  • Employers are required to disclose the following information in writing to the Appropriate Representatives :-

    (a) the reasons for the redundancy proposals
    (b) the number and description of the employees whom it is proposed to dismiss as redundant
    (c) the total number of employees of any such description employed by the employer at the establishment in question
    (d) the proposed method of selecting the employees who may be dismissed
    (e) the proposed method of carrying out the dismissals, with due regard to any agreed procedure, including the period over which the dismissals are to take effect, and
    (f) the proposed method of calculating redundancy payments for individual employees, if this is different to the statutory scheme

  • The information has to be either delivered to the Appropriate Representatives by hand or posted to an address nominated by the Representatives because of the requirement that the information must be disclosed in writing, it will not be sufficient for the information to be given verbally, eg. over the telephone.
  • Consultation must be about ways of :-

    (a) avoiding the dismissals
    (b) reducing the numbers of employees to be dismissed, and
    (b) mitigating the consequences of the dismissals

  • Consultation must also be “with a view to seeking agreement”. In other words it cannot be a sham. The employer must enter into consultation with an open mind on the basis that it may actually affect what happens
  • Consultation must begin when proposals are still at a formative stage and the Representatives must have been given adequate information upon which to respond and adequate time in which to do so. The employer must then consciously consider any response put forward by the Representatives
  • Collective consultation is essential where there are more than 20 employees involved and an employer will only be excused if there are “special circumstances” which render it not reasonably practicable for the employer to comply with all of the statutory requirements. Even in these circumstances however an employer must still comply so far as is reasonably practicable in the circumstances
  • If an employer fails to supply all the required information or comply with its obligations about consultation, then an application may be made to an Employment Tribunal for compensation called a “Protective Award”. The maximum award will be 90 days’ pay for each employee where 100 or more employees are to be made redundant or 30 days’ pay for each employee in other cases.

Protective award

An employee may make a complaint to an Employment Tribunal that an employer has failed to meet the requirements under TULR(C) A to inform and consult. Complaints about a failure relating to the election of employee representatives may be made by any of the affected employees or by any of the employees who have been dismissed as redundant. A complaint about any other failure relating to employee representatives may be made by any of the representatives to whom the failure related. A complaint about a failure relating to trade union representatives may be made by the trade union. In any other case, a complaint may be made by any of the affected employees or by any of the employees who have been dismissed as redundant.

The employer is required to pay employees covered by a protective award their normal week’s pay for each week of a specified period, known as the protected period, regardless of whether or not they are still working. To be covered by an award, they must be employees whom the employer plans to dismiss or has already dismissed as redundant and they must be employees in whose case the employer has failed to comply with the consultation requirements under TULR(C) A. The protected period will begin with the date on which the first dismissal takes effect or the date of the tribunal award - whichever is earlier. The length of the period will be determined by the tribunal, taking into account the extent of the employer’s failure to consult and any extenuating circumstances. It is however subject to an upper limit of ninety days in all cases.

A complaint will not normally be considered unless it is made within three months of the date on which the last of the dismissals takes effect (although in exceptional cases where the tribunal considers that it was not reasonably practicable for a complaint to be made in time it can allow a longer period).

Where the tribunal finds a complaint justified it will make a declaration to that effect. In appropriate cases, whether or not the employees are still employed, the tribunal may take steps to safeguard the employees’ remuneration by making a "protective award". It can do this at the same time as it makes the declaration or later, after a further application to the tribunal.

Selection for Redundancy

  • The criteria used to select employees for redundacy should be as objective as possible. Consider last in first in (“LIFO”), skills and performance, attendance and disciplinary record, experience and aptitude. Consider whether each criterion should have equal weight
  • In considering the pools from which employees will be selected for redundancy, consideration must be given to the type of work carried out by the employees including whether jobs are interchangeable, whether other groups of employees are doing similar work to those in the group from which selection is proposed to be made and whether an employee’s inclusion in a pool is consistent with his or her previous position
  • The employer must then ensure that the individuals chosen to make the selections for redundancy are properly capable of assessing the individuals in the pools for selection and ensure that they have been given guidance on how to apply the selection criteria.

Announcement to Workforce

  • At the outset of the redundancy programme it is advisable that a general announcement about the proposed redundancies is made to confirm the reasons for the proposed redundancy exercise and to confirm that no decisions will be taken without full consultation with employees in the areas affected. This announcement can either be by way of general letter or general meeting. There should then follow individual letters to employees in the areas affected inviting voluntary redundancies

Individual Consultative Meetings

  • Notwithstanding any obligations for collective consultation employees should also be consulted on an individual basis
  • Employees should be advised fully as to how their position may be affected, the way in which they may be selected for redundancy, how the redundancies are to be carried out including the period of time over which it is proposed the redundancies are to be implemented. Employers should ensure employees have a full opportunity to make representations
  • There should be an initial meeting with each employee to explain that the employee is considered to be a potential candidate for redundancy. The selection criteria should be explained to the employee. The employer should also indicate what consideration has been given to the possibility of alternative employment and if none is available this should be explained to the employee
  • There should then if possible be a second meeting ideally at least two weeks after the first meeting. At this meeting the employee should be given the opportunity to submit any further representations which have occurred to him or her since the initial meeting. Further individual consultative meetings may be necessary depending upon what the employee says and time constraints.

Individual Periods of Notice

  • Individual notices of dismissal may not normally be issued to employees in a collective redundancy situation until the consultation process has been completed in accordance with these statutory requirements (unless the “Special circumstances” defence exists. The required notice period will depend on what an individual’s contract of employment provides for, subject to the minimum periods set out in section 86 of the Employment Rights Act 1996.

Alternative Employment

  • Employers should try to offer suitable alternative employment if available and this should be discussed in the individual consultative meetings with the employees as well as in the collective consultative meetings with the Appropriate Representatives.
  • If an alternative position is offered to and accepted by an employee the employee has a statutory right to a trial period of 4 weeks in the alternative job. The effect of the trial period is to give the employee a chance to decide whether the new job is suitable.
  • The trial period may be extended to retrain the employee for the new work, by agreement between the employer and the employee. Such agreements must be made before the employee starts the new work; must be in writing; and must specify the date that the trial period ends and terms and conditions of employment that will apply after that date.
  • If the employee leaves or gives notice within the trial period the employee will get a redundancy payment only if the job was unsuitable and he or she did not act unreasonably in leaving it (subject of course to the employee having 2 years’ continuous service). If an employee is dismissed within the trial period the employee will get a redundancy payment unless the dismissal is for any reason unconnected with the fact that he or she is on trial in the new job.

Confirming Redundancies

  • If possible individuals should be advised of the decision to make them redundant in a brief meeting. This can be then confirmed in writing. Employers should ensure employees are given their full contractual notice or they receive an appropriate payment in lieu. Employers may also wish to consider providing assistance in looking for a new job by liaising with employment agencies/job centers

Time off for Interviews

  • If employees are required to work during their notice period they are entitled to reasonable time off with pay. This should be agreed by the individual under notice with his or her direct manager.

REDUNDANCY CHECKLIST

1. Are redundancies necessary?
2. How many redundancies are there to be. Are there more than 20 within 90 days or less?
3.* Elect Employee Representatives if more than 20 redundancies proposed.
4 (a) Decide upon appropriate selection criteria/pools for selection and the selection panel.
(b) Commence consultation with Employee Representatives.
(c) General announcement to the workforce (invite voluntary redundancies).
(d) Notification to Department of Employment.
5. First individual consultative meeting. Discuss alternative employment if there is any.
6. Apply the selection criteria.
7. Further individual consultative meeting to advise employees on provisional selections. Has anything been said to change the position? Is further individual consultation necessary? Is there a need to reconsider the application of the criteria?
8. If employees take up offers of alternative employment, remember the statutory trial period of 4 weeks.
9. Confirm the redundancies to the employees concerned in writing. Ensure proper contractual notice is given or employees are given an appropriate payment in lieu. Confirm redundancy entitlement. Remember the employee is entitled to reasonable time off to look for work if he or she is working during their notice period. Consider help for employees to look for new employment.

* NB. assumes no existing Employee Representatives and that there is no recognised Trade Union.

CRITERIA MARKING SYSTEM

(By way of example only – criteria should only be adopted after consultation and, if possible, agreement)

Redundancy Selection Factors Points      
1. Length of Service years  
       
  01 to 05 years 05  
  05 to 10 years 10 /20
  10 to 15 years 15  
  Over 15 years 20  
       
2. Attendance Record   /10
3. Time-Keeping Record   /10
4. Disciplinary Record   /10
5. Performance in present job   /10
6. Flexibility/Adaptability   /10
7. Attitude to job/company   /10
       
      80

REDUNDANCY MATRIX

(By way of example only)

CRITERIA

A

B

C

 

 

 

 

Name of Employee

David Smith

George Jones

Harold Brown

Position

Production Line Manager

Production Line Manager

Production Line Manager

Branch of Employment

Manchester

London

Guilford

Length of Service

12 years

10 years

5 years

Attendance Record

9

7

10

Time-Keeping Record

10

8

10

Disciplinary Record

10

9

10

Performance in present job

8

9

9

Flexibility/Adaptability

9

8

9

Attitude to job/company

9

8

10

TOTAL MARKS

70/ 80

59/ 80

63/ 80

 

back to home page

 

Employment Law Issues - view section

Employment Law Procedures - view section

Sample Documents - view section