Legal Rights During Redundancy Consultations: Employer Responsibilities

When you run your business, you may employ staff to run it effectively. However, business circumstances can change, such as when profits are low, or you decide to reduce your business activities. Where this occurs, you may need to reduce your employee numbers and make redundancies. If so, you must follow any legal rules to honour your employee’s legal rights; otherwise, you could face an employment tribunal or a fine of an unlimited amount if you do not notify RPS within the correct time frame. Therefore, this article will explain legal rights during the redundancy consultation process.

What is Redundancy?

Redundancy is one way to dismiss employees from their job roles. You may need to do this when you need to reduce the number of employees making up your business workforce.

As an employer, you must implement a fair process when making staff redundant from your business. This means that you carry out particular processes as part of your redundancy procedure, which includes consultation. If you do not consult your employees correctly during redundancy consultation, you could face a claim in an employment tribunal.

What is a Redundancy Consultation?

Redundancy consultation is one of the processes you, as an employer, must carry out when you go through the redundancy process. This means that you must communicate with your employees unless they are on a fixed-term contract about:

• why you are making redundancies; and
• whether you can offer any alternatives to redundancy.

Your collective consultation during a redundancy process does not mean that you and your employees must reach an agreement, but you should try to.

When considering what employment you may be able to offer, you should note that any suitable employment must be provided to any employee recently on or currently on any type of parental leave or maternity leave. 

To determine the suitability of any jobs you can offer, you need to consider the following:

• similarities to the employee’s current role;
• the job terms of the new role;
• your employees’ skills and their circumstances; and 
• the hours, location, status, and pay of the job you offer. 

What are the Legal Collective Redundancy Rules?

When you conduct a redundancy consultation, you may have to abide by the collective redundancy rules. These apply where you make 20 or more redundancies at one time. This means that rather than communicating directly with your employees, you will communicate through their representatives. A representative will either be:

• a trade union representative where they are part of a trade union; or
• an elected employee representative.

When conducting a collective consultation, where the collective redundancy rules apply, you must consult for a specific time. This is:

• a minimum of 30 days before you dismiss anyone, where the latter consists of 20 to 99 people; or
• a minimum of 45 days before redundancy dismissal where you are making 100 or more people redundant.

What Must Collective Redundancies Cover?

There are specific areas in redundancy consultations that must be covered if you need to comply with the collective redundancy rules. These include:

• why you need to make redundancies in your business;
• how you ensure you dismiss as few employees as possible; and
• how you will minimise the effects redundancy has on your employee to a minimum, which can include, for example, offering retraining. 

Collective Consultation Steps

When you carry out a collective consultation for redundancy under the collective redundancy rules, these are the steps you must take:

1. let the Redundancy Payments Service (RPS) know before you start (where the deadline is determined by the number of planned redundancies) using form HR1;
2. consult with your employee’s representatives;
3. give employee representatives a reasonable time to consider;
4. provide further conditions where this is requested; and
5. pass staff termination notice to employees who will be made redundant detailing their leaving date 

At the end of the consultation process, the final step is issuing redundancy notices to affected staff.

2024 Key UK Employment Law Changes

As an employer, it is crucial to stay compliant with ever-evolving employment law. This factsheet outlines key changes in 2024 that will affect how you manage your workforce.

Download Now

Key Takeaways

If you decide to dismiss staff to reduce your workforce, you may need to carry out the redundancy process. This must be done fairly and comply with your legal obligations. One of these is to carry out a consultation process where you tell staff why you are making redundancies and to try to offer alternatives. If you plan to make 20 or more staff members simultaneously, you must comply with the collective redundancy rules. This means you communicate with a representative for your employees and must carry out the process in a specific time frame, depending on the number of redundancies. 

Collective redundancy rules require you to cover specific points, such as why you are making the redundancies. You must also legally comply with particular steps, such as letting the Redundancy Payment S(RPS) know you will start the process by a specific time before doing so 

If you need help understanding redundancy consultations, our experienced employment solicitors can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. So call us today at 0808 196 8584 or visit our membership page.

Frequently Asked Questions