The process of managing individual redundancies differs from that of collective redundancies, including the individual redundancy consultation requirements. This makes it important for employers, HR and managers to understand the difference and follow the correct and lawful procedures to avoid tribunal claims.
Making an employee redundant
Employees become redundant if you are no longer carrying out the business in which they were employed, or if your requirement for an employee to perform work of a specific type or at a specific location has ceased or diminished. In other words, you no longer need them because the business has ceased, or you simply do not need that many employees to do a particular kind of work.
What is the individual consultation process for redundancy?
All employees are entitled to a consultation with their employer if they are at risk of being made redundant, or are ‘affected’ by the redundancies of others, even if they are not at risk themselves. A consultation process is a period of constructive dialogue and information-sharing between an organisation and its employee, which may or may not result in redundancy.
The type of consultation depends on the number of employees being made redundant at the same time.
- If there are between one and nineteen employees being made redundant then there are no rules on how this consultation should be carried out, except that it should be meaningful.
- If there are more than 20 employees being made redundant, then the rules on collective redundancies apply, the consultation periods are longer, and there are rules on when you must start the consultation.
It is important to note that voluntary redundancies are included in the total figure.
For fewer than twenty employees, there is no stipulated start date for the consultation period. However, you must have in mind the statutory notice periods when planning the redundancy process.
Statutory notice periods are as follows:
- if the employee has been employed for between one week and two years, then the notice period is one week;
- for between two and twelve years of employment the notice period is one week for each complete year of employment; and
- for employment over twelve years, the notice period is capped at twelve weeks.
You should check your employees’ contracts on an individual basis in case they are entitled to more notice than the statutory minimum above.
How long should individual consultation period last?
It is impossible to say for how long an individual redundancy consultation period should last. The golden rule is that it must be long enough for you and the employee to have had time to consider your positions and for the employee to feel that their feedback has been considered. Sometimes two separate meetings with an employee will be sufficient. However, it could be that up to four meetings are necessary, with the final meeting being the dismissal meeting, in order for the appropriate amount of information sharing between employee and employer to take place.
What happens at the individual consultation meeting?
The first step is for your organisation to collate essential information to present to those employees who are potentially affected by redundancy. It is imperative that you do not present your employee with a finalised plan for their redundancy. This will invalidate the process and could lead to a successful claim for unfair dismissal against you.
The initial information should include:
- why you need to make some employees redundant;
- which employees are at risk, sometimes referred to as ‘the pool’;
- the process you will follow and whether voluntary redundancy applications will be considered; and
- the proposed method(s) by which employees will be selected for redundancy.
You should then hold your first individual meeting. You will have to elaborate on the basic information outlined above. For example, why that employee has been included in ‘the pool’, the expected timing of the redundancies, what the redundancy packages will look like, deadlines for making applications for voluntary redundancies and how, and by when, employees should share their views on ways in which redundancies might be avoided and any feedback on the proposed selection criteria.
You should view the individual consultation meetings as an opportunity for your employee to ask questions and feedback their ideas to you. For example, following initial meetings with their employees, some organisations find that they have avoided redundancies altogether or significantly reduced their numbers because employees have been willing to enter into other arrangements. For example, employees may agree to reduce their hours (either temporarily or permanently) or to temporary lay-offs, to take a period of unpaid leave, or accept redeployment opportunities.
It is highly advisable to have someone taking minutes at the meetings. These should be circulated to the attendees after the meeting. Alternatively you can write to the employee outlining the contents of the meeting after it has taken place.
It will depend on the complexity of the process as to how many meetings will be needed. If an employee objects to one or more of the proposed selection criteria, for example, you should hold a meeting with them to go through their objections in detail. You should be careful to take seriously suggestions made by employees – these should be noted and followed up.
It may be acceptable for you not to agree with their analyses or proposals. However, you must have a paper trail showing that you considered their ideas and why you ruled them out. The law does not state that you must reach an agreement with the employee, simply that you should act reasonably in arriving at your decision to dismiss that particular employee.
What happens once you have selected an employee for redundancy?
If, having applied the selection criteria, you decide that a particular employee is to be made redundant you will have to hold another meeting with them to explain the outcome of the selection process. You should give them the opportunity to challenge their selection. You should also review the process to date, including looking again at whether there is alternative employment available in the organisation, and outline the next steps. These will include the redundancy payment calculation, how and when notice will be given to terminate the employee’s contract and what time off you are offering for the employee to look for alternative employment.
An employee selected for redundancy is entitled to a reasonable amount of time off to look for other work or attend interviews. An employee with two or more years of service by the time their notice period ends is entitled to be paid up to 40% of a week’s pay in total under the scheme. This means that regardless of how much time off an employee takes, you will only need to pay them for two days of leave (assuming a five-day working week).
At the final dismissal meeting, you will have to allow the employee to be accompanied by a trade union representative or colleague, if you have not done so until now. Employers should consider their position on this matter extremely carefully to avoid a claim for unfair dismissal in the Employment Tribunal.
The final meeting is an opportunity for you to summarise the redundancy process and the decision made. The employee should be issued with a letter stating their notice period, the date of which their employment contract will end, the redundancy payment and how it has been calculated, any additional pay owed to the employee, when the extra sums will be paid and the employee’s right of appeal and how they can exercise this. It is important to note that employee’s right to appeal against their dismissal is separate from the redundancy process, but will nevertheless require an additional step in accordance with the dismissal procedure of your organisation.
Other important considerations
If you are considering making an employee on maternity leave redundant then there are several extra considerations. You are allowed to make an employee on maternity leave redundant, but you must be certain that the employee has not been chosen because they are on maternity leave, either overtly or subconsciously.
An employee on maternity leave is also given extra protection by the law. Regulation 10 of the Maternity and Parental Leave Regulations 1999 states that an employer must offer an employee on maternity leave at risk of redundancy suitable alternative work if there is some, and that this offer should be in preference to other employees at risk of redundancy, even where they might be better suited to the role.
As so many employees are now working remotely, usually at home, you may also have to consider the suitability of carrying out an individual redundancy consultation process by telephone or video conference. There is no legal requirement to carry out the consultation face-to-face. The key thing here is to engage early with the employee as to their preferences and needs, and to try to accommodate these wherever you can. For example, if you do agree with the employee to carry out the process remotely, they should still be given ample opportunity to ask questions and consider their position. You should also make sure you facilitate the attendance of a trade union representative or colleague where appropriate.
Can you make an employee redundant without individual consultation?
You can make an employee redundant without formally consulting with them. However, if you do so you should be aware that you are opening up your organisation to a claim for unfair dismissal.
Redundancy is one of the five legally fair reasons for the dismissal of an employee stated in the Employment Rights Act 1996. However, if you mishandle the redundancy process your employee may still have a claim for unfair dismissal against you. This is because whether or not the dismissal is fair or unfair depends on whether the employer acted reasonably in arriving at the decision to dismiss the employee. If you are careful to follow a meaningful individual consultation process, and this is properly documented, you should be able to show that you acted reasonably in coming to your decision.
In particular, by involving employees in devising the selection criteria and allowing them to feedback on their individual score, and allowing your employee to be accompanied by a trade union representative or colleague from an early stage in the redundancy process, you should be able to avoid a claim in the Employment Tribunal.
Individual redundancy consultation FAQs
Can you be made redundant without consultation?
No, you cannot be made redundant before being ‘consulted’ by your employer first. However, the law does not state how that consultation should be carried out for individual employees, only that it should be meaningful. If an employee can show that their individual consultation was a sham or that the employer acted unreasonably in making the decision to make them redundant, then they could have a claim for unfair dismissal in the Employment Tribunal.
What should happen in a redundancy consultation?
A redundancy consultation should involve at least two meetings with the employee and must be a genuine attempt by the employer to engage with its employee over the question of their possible redundancy. Employers should not begin the redundancy process with a fixed idea of who will be made redundant. Instead, employees should be allowed to contribute their own ideas as to how redundancies might be minimised, and on the selection criteria for identifying those employees to be made redundant.
Does consultation mean redundancy?
Consultation does not necessarily mean that an individual employee will be made redundant, as the law states that any employee ‘affected’ by redundancies should be consulted. The consultation process should be meaningful, i.e. a genuine attempt by employers to avoid compulsory redundancies as an outcome. Therefore, if an employee has an idea about how work could be restructured to avoid redundancies then they should share this with their employer, as this is the point of the consultation process.
Who can I take to a redundancy consultation?
You will have to check the redundancy policy of your employer to see what it says about being accompanied by a trade union representative or colleague to meetings during the redundancy process. Most employers will allow this. However, there is no legal right for you to be accompanied until you actually attend a dismissal meeting, i.e. the meeting at which the termination of your employment contract is confirmed and you are given formal notice of the date upon which the contract will terminate.
The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.