Masterclass: How to consult on collective redundancies

With the coronavirus job retention scheme soon coming to an end, Sarah Austin explains how to manage cutting 20 or more roles

The imminent winding down of the government’s furlough scheme unfortunately means many businesses will be faced with the need to make large-scale job cuts. Employers that are proposing to make 20 or more employees redundant within a period of 90 days or fewer will need to collectively consult. Technical breaches of this duty could result in an award of up to 90 days’ uncapped pay per employee, and failing to collectively consult could also result in a finding of unfair dismissal, so it’s essential that HR professionals understand the additional obligations arising from this duty. 

Collective redundancies differ from a ‘normal’ redundancy in a few ways, with the most fundamental difference being that employers must consult employees via appropriate representatives, such as trade union or employee elected representatives. This can sometimes be difficult and slow down the overall process, so it is advisable to put accessible Q&A documents in place and update them throughout the consultation process to help ease the pressure on representatives and speed up communication. 

To start the process, employers give the selected representative specific details of the redundancies in a letter called a section 188, and this information is passed on to the employees. There must be at least 45 days (for 100 or more redundancies) or 30 days (for 20-99 redundancies) between the section 188 letter being presented and the first dismissal taking effect. Firms must also notify the government about the proposed redundancies using an HR1 form.

The business may reach a stalemate with representatives before the end of the minimum period, but there is no requirement to actually reach an agreement with representatives following consultation, or to continue consulting for the remainder of the minimum period, provided all possibilities of reaching an agreement have been exhausted. Employers can also serve notice to individual employees before the expiry of this minimum period, provided they have fully consulted with appropriate representatives and employees individually before doing so, and that employment doesn’t actually end before the end of the minimum consultation period.

Sarah Austin is an employment partner at Capital Law