Getting redundancy right

An employee who has sufficient qualifying service (currently, generally two years’ continuous service) has the right not to be unfairly dismissed. “Redundancy” is a fair reason, as prescribed by The Employment Rights Act 1996.

A redundancy situation can occur in one of three scenarios:

• where a business as a whole is closing down;
• where the business is closing in a particular location; or
• where there is a reduced requirement for employees with certain skills.

Where a business intends to make less than 20 redundancies within a 90 day period, an employer is required to consult with ‘at risk’ employees on an individual basis.

Individual consultation usually includes at least one consultation meeting with the employee to explain the redundancy process with a view to exploring ways of avoiding redundancy – this may include through finding suitable alternative vacancies within the organisation.

Where a business proposes to make 20 or more employees redundant over a period of 90 days or less, an employer must ‘collectively consult’ with appropriate representatives of the affected employees and notify the Secretary of State using Form HR1. There is a specific process that must be followed for collective consultation purposes:

• Where 20 – 99 redundancies are proposed, consultation must begin and notification to the Secretary of State must be received at least 30 days before the first dismissal takes effect.
• Where 100 or more redundancies are proposed, consultation must begin and notification to the Secretary of State must be received at least 45 days before the first dismissal takes effect.
• In the absence of a recognised trade union or existing body of representatives to consult with, employers may have to arrange for the election of employee representatives.
• In addition to collective consultation, employers will also be required to consult an individual basis.