Collective Consultation

Statutory consultation obligations apply when an employer proposes to dismiss as redundant, 20 or more employees at one establishment within a period of 90 days. This includes employees with less than 2 years’ service. ‘Dismiss’ in this context covers not only those employees whose employment is terminated, but also those whose contracts may be terminated but whom the employer nevertheless retains in some revised capacity. Therefore, it is important to consult in respect of all employees ‘affected’ by the proposals.

Consultation must begin ‘in good time’ and must take place before notice is given. As such, it cannot run concurrently with the period of notice. Where the employer proposes to dismiss fewer than 100 employees, not less than 30 days must elapse before the first of the dismissals takes effect. If 100 or more employees are affected, then the employer must consult for not less than 45 days. It is therefore important to take early legal advice if considering this step.

The duty is to inform appropriate representatives, meaning representatives of the appropriate recognised trade union, or duly elected employee representatives.

As a minimum, employers must undertake consultation with a view to reaching agreement on ways of avoiding dismissals, reducing the number of dismissals and mitigating their consequences. It is not sufficient for an employer simply to explain its proposals and listen to any counter-proposals.

The sting in the tail is that unless there are ‘special circumstances’ precluding the ability to consult for the requisite time periods (for example, a company is placed into immediate administration), then the employer could be liable to pay a ‘protective award’ of up to 90 days’ pay per employee.

If furlough leave is still available into the near future once restrictions are lifted, then the question arises as to whether an employer must collectively consult when initiating a further furlough scheme. The obligation might be triggered if sufficient numbers do not consent to furlough leave, such that the prospect of redundancy becomes a reality for 20 or more employees. The obligation may also be triggered if an employer is considering a furlough scheme alongside a well-advanced plan to make redundancies.