Redundancy Consultation

Here are our top 10 tips for redundancy consultations – one of the more complex areas of strategic HR.

One of the more complex areas of strategic HR is business restructure and redundancy consultation. This is because it is a consultation process, where your case is open to challenge and scrutiny you must consider alternatives to your proposal to ensure a fair process.

Employers have a legal duty to reduce or mitigate the need for redundancy dismissals wherever possible. This is important to remember when you are considering a redundancy programme.

Before embarking on a redundancy consultation, employers must first explore all alternatives. Such as reducing costs in other areas if the driver is financial. Or redistributing resource into other areas if there has been a reduction in workload, the proposal for which would also require consultation and agreement. 

The cornerstone to any fair and effective consultation is your business case for change. The ‘why’ behind your proposal to reduce headcount must be reasoned and evidence driven in a document explaining the circumstances that have lead to the proposal, and what measures have already been taken to address the situation. 

For employers with collective bargaining, or trade union recognition agreements, you are legally obligated to engage with the relevant trade union in any potential redundancy consultation process, and you must proactively engage them before you pit any of their members ‘at risk’ of redundancy.

Where you are proposing to dismiss as redundant 20 or more people, you must first consult collectively for at least 30 days with trade union or employee representatives elected for the purpose of consultation. 

This period increases to 45 days when proposing to dismiss 100 or more people. 

Consultation is essentially a two way conversation where you explain your proposal, and invite challenge, or alternatives before make a final decision. This includes consultation on any selection criterial proposed to be used during the process.

Ideally quantifiable data driven metrics derived from your employment records such as evidence of skills, qualifications, performance ratings, attendance and disciplinary records should be used. 

it is not acceptable or best practice to expect people to apply for their own jobs in a redundancy situation. A recruitment style approach is only appropriate during a business restructure where new roles are being created, or when considering redeployment options for ‘at risk’ individuals.

Only once all alternatives to redundancy have been explored, considered and rejected should you move to any final meeting where dismissal might be the outcome. You must be able to effectively explain why you have reached this decision in sufficient detail so the employee understands and proved you have consulted in good faith.

However, if they are separate issues they can be considered in parallel and resolved before dismissal. 

Check out our RnA Top Ten’s for the Grievance Procedure.

Not sure where to start with HR? Or are you a HR veteran and just need a little support in terms of documents and systems. No matter your situation or employee numbers – we’re here to support you.