Consulting with employees

One of the most important aspects of getting redundancy right is consultation.

In fact, it’s so important that failing to consult will almost always render a redundancy dismissal unfair — something set in stone by the courts more than 30 years ago (Polkey v AE Dayton Services [1988] ICR 142).

The process you need to follow — and how long you need to consult for — depends on how many people you anticipate making redundant. If it’s fewer than 20 people, consultation is generally straightforward.

But if you’re thinking about making more than 20 employees redundant, special ‘collective consultation’ rules apply. In a nutshell, they require you to consult with a recognised trade union,or to hold elections for employee representatives and consult with them instead. The consultation has to last for at least 30 days (45 days if you’re thinking of making more than 100 redundancies), and you’ve also got to notify the Government.

I go into detail about collective consultation in Module 7, but I’ll just focus here on consulting when fewer than 20 employees are involved. And this in a nutshell is what you must do:

1. Consult before you have fully formulated your proposals. You’ll need to have a good idea of what might happen, but it can’t be set in stone.

2. Give your employees meaningful information. You’ve got to give them enough that they understand the situation and can respond in a meaningful way.

3. Give them time to respond. Allow them time to take in what you’ve said, to think about how they want to respond, and to explain their position back to you. A rushed process is a bad process.

4. Listen to their suggestions. You’ve must think about their ideas fairly and sensibly. Even if there seems little alternative to making redundancies, the more the employer can show a shift in position in response to consultation, the easier it will be to show that it was a genuine exercise.

When do you start the consultation process?

Start as early as possible, while the proposals are still at a formative stage and can be changed based on employee feedback. If you consult after the decisions have been made and when it’s too late to change the number of redundancies or the selection scores, the consultation may be regarded as a sham. And that will mean it is unfair.

How long should consultation last?

The answer is, it depends. If you’re making a single person redundant, and there’s no alternative employment available, you can spend less time on consultation than if you’re going through a selection process to choose eight people from a pool of 15. With the former, you’re probably looking at a week. With the latter, it’ll take as long as it takes, which could easily be a four-week process.

What do you need to cover?

There are four steps you need to cover when holding an individual consultation:

1. How you scored them — in Module 5, I look at the criteria you should use when creating a ‘selection pool’, which I cover in Module 4. This gives the employee the chance to argue their scores should be reassessed.

2. Any proposals the employee might put forward to avoid redundancy, such as job sharing or salary reduction.

3. Investigating whether there is any suitable alternative employment available —something I discuss in Module 8.

4. And just giving the employee a chance to say anything else they want.

Two good questions to end any consultation meeting with are:

1. Do you feel this has been a fair process?

2.. Is there anything else you’d like to say?

Normally, you will need at least two meetings before a decision to dismiss is confirmed. Always keep careful notes of the meetings, both of what you say, and of what they say.

There’s an increasing trend for employers to use an interview with the employee to make the actual assessment of who should be made redundant. What happens is that affected employees are asked to apply for the remaining roles, and the employer runs what amounts in effect to a recruitment exercise.

While doing this is not unfair in itself, it’s important to make sure that you don’t put too much weight on performance as interviews and assessments are essentially tools used to recruit new staff.

Consulting with people not in the workplace

You need to include people who are on long-term absence in the consultation process, such as those on maternity leave, on sickness leave, or on furlough. There may be special adjustments to be made when scoring them for things like performance and absence — I look at this in detail in Module 5 — and women on maternity leave have the benefit of special rules when it comes to being offered suitable alternative employment.

Some employers are currently worried that engaging in consultation will be ‘work’ and so will break furlough. If you are worried about it you can just pay them for the time involved in any consultation, and it won’t break furlough.

To carry out the consultation, you can invite them in but it’s often desirable to avoid face-to-face meetings with pregnant women or those on long-term sick. If that’s the case, you should consult using Zoom, Skype, or a similar platform, provided the employee has the chance to look at documents and prepare their response in advance.

Here are three top consultation tips...

1. Start the consultation process before finalising your redundancy plans

2. Always give employees a genuine chance to put forward alternative ideas

3. Don’t forget to include staff who are on long-term absence.