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Rachael Lloyd’s article first appeared in CIPD’s People Management, published here on 7 March 2025.
Individual consultation
An employer considering making redundancies must consult with affected employees when proposals are at the formative stage and when consultation can still make a difference to the outcome. Employers must approach the consultation process with an open mind and be capable of influence – this is not a tick box exercise.
The employer must provide affected employees with adequate information and time to consider the proposed redundancies, and then listen and consider the affected employees’ responses to the consultation.
Individual consultation will usually involve at least a couple of meetings with each affected employee. This allows the employee to consider and respond to the employer’s proposals, the employer time to consider the employee’s responses, and then for the employer to confirm its outcome.
The individual consultation process will usually involve providing employees with the opportunity to:
- suggest alternatives to avoid redundancies;
- comment on the pool and selection criteria;
- challenge provisional selection assessment;
- consider alternative employment;
- raise issues/concerns regarding the process.
During individual consultation, allow employees to express their views both on issues which are particular to them and which are common to the group as a whole.
There are no minimum timescales for how long individual consultation should last, but very short consultation periods suggest consultation was not carried out adequately.
Both the Employment Appeal Tribunal (EAT) and Court of Appeal have recently grappled with the issue of individual redundancy consultation. In De Bank Haycocks v ADP RPO UK Ltd, the EAT found that a small-scale redundancy process (involving two dismissals) was unfair because there had been ‘no general workforce consultation’ about the redundancy proposal. This was concerning to employers as it appeared to introduce a new obligation to consult the workforce in all redundancy exercises of any size.
However, the appeal court overturned this decision, finding the EAT had been wrong to suggest that, for smaller-scale redundancies in non-unionised workforces, it was a requirement for employers to conduct general workforce consultation.
Collective consultation
Where an employer proposes to make 20 or more employees redundant at one establishment within 90 days or less, they must collectively consult with appropriate representatives of the affected employees.
Collective consultation will happen with a trade union if recognised union; if no union is recognised, the employer will consult with an appropriate standing body of representatives, or elected employee representatives (note: there are prescriptive rules for the election process).
Where fewer than 100 redundancies are proposed, consultation must start at least 30 days before the first dismissal takes effect. Where 100 or more redundancies are proposed, the minimum consultation period is 45 days.
The process starts with the employer providing statutory information to the representatives (such as the reasons for the redundancies, the numbers, the proposed method of selection etc). Consultation must then be undertaken with a view to reaching agreement on ways and means of avoiding the dismissals, reducing the number of dismissals and mitigating their consequences.
It is crucial that the representatives understand the matters which are subject to consultation and are able to express their views on those subjects, with the employer considering those views. Similar to individual consultation, the consultation should happen at the formative stage by providing enough information and time for representatives to respond, and then the employer listening to those responses with a willingness to be persuaded.
Collective consultation is not a substitute for individual consultation. Even when collective consultation is necessary, an employer must still consult with individual employees (but this process may be curtailed/shaped by the preceding collective consultation).
Upcoming changes
Labour’s Employment Rights Bill (ERB) will introduce a number of changes to collective consultation. The headline points to note are as follows:
- Originally, the ERB proposed removing the wording ‘at one establishment’ from the collective consultation obligations, which would have meant that all redundancies across the entire business – even if they were at different sites – would have counted towards the collective redundancy thresholds. However, the latest amendments to the ERB will not remove the wording ‘at one establishment’, so that rule will remain the same. This is good news for employers.
- However, the ERB proposes introducing an additional threshold for redundancies over multiple establishments. Details of the threshold will be set out in further regulations, but are likely to be either a set number over 20, or a percentage of the workforce. This is likely to mean that more multi-site redundancies will meet the threshold for collective consultation.
- The amended ERB proposes including a provision that, during collective consultation, the employer does not need to consult all employee representatives together or try to reach the same agreement with all of the representatives. This is likely to be particularly relevant for redundancies across multiple sites.
- The amended ERB proposes an increase of the cap on protective awards in collective redundancy situations, from 90 to 180 days, to encourage employer compliance. The consequence of this could be very costly for employers.
- Further guidance for employers on collective consultation processes will be produced in due course.
Complying with consultation requirements is a crucial part of a fair redundancy process. The changes under the ERB will result in more redundancy situations being caught by the collective consultation rules, which will likely increase legal risk. Coupled with the increase in protective awards, this could mean that employers not only risk facing more claims, but those claims may become more complex and expensive.
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