Consultation and selection

How and when should your employer consult you?

You must, by law, be consulted about your employer’s plans if they intend to make you redundant. The intention of this is to give you the opportunity to influence the decision.

You should always be consulted individually. During this consultation, you should be told why you have been selected for redundancy, and alternatives to redundancy, including any ideas you may have, should be considered. If this does not happen, it may be unfair dismissal and you should seek advice.

In certain circumstances, the employer must also consult collectively. This means that they have to meet with any recognised union or worker’s group (or if necessary arrange for one to be fairly elected by the workforce for this purpose). An unrecognized union can also work on your behalf. Collective consultation applies:

If the employer wants to make between 20 and 90 redundancies at one place of work (establishment or site) in the space of 90 days, in which case the consultation must last for no less than 30 days
If they want to make 100 or more redundancies, the consultation must last at least 90 days.

For this purpose, only permanent employees being made redundant are counted, not temps or contractors.

During the consultation, the employer must give the employees’ representatives certain information to enable them to respond effectively. They must be told:

The reasons for the proposed redundancies
The numbers and types of employees who will be affected
How the employer proposes to select those to be made redundant
How any redundancy payments above the legal minimum are to be worked out.

The union or staff association will then try to negotiate for redundancies to be voluntary rather than compulsory, for redundancy pay to be above the statutory minimum, and for outplacement and training resources to be made available to help those affected to find new jobs.

During the consultation, there must be genuine intent on the employer’s part to try to reach an agreement, even if, in the end, this is not possible. It is not sufficient for consultation to just be a ‘tick in the box’. If it appears that the employer has not consulted fairly, this can be grounds for taking them to an employment tribunal.

Although consultation may seem futile it is always worth trying. Sometimes it is possible to save jobs by helping the employer to solve its underlying business problem (usually by cutting costs). During the spring of 2009, a number of household name companies in the UK worked with unions to agree alternatives to redundancies, among them:

A deal between Honda and union Unite saved 490 jobs by agreeing a four month shut-down followed by a 3% pay cut for workers and 5% for managers
BT was under pressure to reduce staff costs by 10%. With the support of the Communication Workers Union, it offered thousands of employees the chance to take a year’s holiday in exchange for receiving 25% of their normal wage for the year. It also offered incentives to move from full-time to part-time working, and the chance for parents to take school holidays off.
Pilot’s union, Balpa, struck a ‘wage cuts for shares’ deal with cash-strapped BA.

Redundancy notices must not be issued until the consultation period is complete. If circumstances make it impossible for an employer to consult fully, they must demonstrate that they have done everything they reasonably can to fulfill these obligations.

For more detail about the legal requirements on redundancy consultation, see here.

Fair selection – how your employer selects people for redundancy

If multiple redundancies are planned, the trade union or staff body should ensure that the employer’s criteria for choosing who is to be made redundant are fair and transparent. They must not discriminate by reason of age, sex, race, disability, trade union membership etc. Your selection can also be deemed unfair if it was as the result of a personal reason, for instance, a poor relationship with your line manager. The employer must be able to show that the basis of selection was fair.

Many employers will run a selection process for the available jobs, so that everyone has a fair chance of being selected.

If you are asked to sign any document which offers to pay you money in exchange for agreeing not to take the employer to an employment tribunal, be very wary indeed. Such a document should not be signed without taking expert advice from a union, ACAS or an employment law solicitor.