It is a legal requirement to consult with employees before a decision is made on whether they are being made redundant. During the consultation process, an employer will discuss the redundancy with the employees (or their representatives), provide information on the redundancy process and explore employee feedback on ways to avoid redundancies.
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How do I prepare for a redundancy consultation?
During the consultation process an employer will usually have a meeting(s) with the employee that is at risk of redundancy (or their representative) to discuss the redundancy.
There are two different types of consultation meeting:
Individual redundancy consultation – In this meeting the employer will meet with the employee to discuss the redundancy situation and explain why they were put at risk for redundancy.
Collective redundancy consultation – This only applies when 20+ people have been made redundant within a 90 day period at a single establishment. In this situation, the employer must follow ‘collective consultation’ rules. For specific guidance on collective consultations contact a member of our team today.
Where individual consultation is required, there are no specific rules on how to carry out the consultation. However, it is always useful to be well prepared for the consultation meeting as employees are likely to have prepared a list of questions about the redundancy. Some employers will prepare a ‘frequently asked questions’ document to help answer queries before the meeting takes place.
The employer should carefully consider who they choose to handle the redundancy meeting and devise a meeting structure to ensure the reasons for the redundancy are explained as clearly as possible. We can assist with chairing redundancy meetings in addition to supporting employers through the redundancy process.
Employees (or their representatives) should be informed of:
- The reasons for the redundancy;
- How many employees are at risk and the selection pool being used;
- The selection criteria;
- The timeframe for the redundancy process (and whether this will include employee’s working their notice period or receiving payment in lieu); and
- How redundancy pay will be calculated (including any company redundancy pay).
What happens during a redundancy consultation?
Redundancy consultation meetings should be meaningful and not just a tick-box exercise. During the redundancy consultation period employees will have an opportunity to discuss all aspects of the redundancy and raise any queries they may have (e.g. about redundancy pay).
It is also a chance for employers to avoid making redundancies and consider alternative options to dismissal. Any suggestions raised by the employee should be carefully considered and discussed with the employee. If their idea would not be suitable, the reasons for this should be explained to the employee.
All meeting minutes should be recorded to evidence that these key discussions have taken place.
How does a consultation process work?
To begin the redundancy consultation process, you will need to invite the employee (or their representative) to a redundancy consultation meeting. This invite is usually contained within the ‘at risk’ letter. Following the initial meeting, you may need to meet with the employee (or their representative) on several more occasions to answer any questions they may have about the redundancy process.
The length of the redundancy consultation process
The length of the consultation process will depend on the number of redundancies being made:
Less than 20 redundancies: no set rules on how long the consultation process should last. In some situations, there will be no need to have any further consultation after one meeting. However, in other situations there will be the need for three or four meetings. Every redundancy situation is unique so the length of time will vary depending on your businesses situation.
20-99 redundancies within 90 days in one workplace: the consultation process must last at least 30 days before a dismissal is made.
100+ redundancies within 90 days in one workplace: the consultation process must last at least 45 days before a dismissal is made.
Again, if there are 20 or more redundancies this would be caught under the ‘collective consultation’ rules. For specific guidance on collective consultations contact a member of our team today.
Redundancy pay calculation
Employees will be entitled to statutory redundancy pay if they have been employed for 2 years or more. Employees (of any length of service) may be entitled to company redundancy pay depending on the businesses policies.
Statutory redundancy pay can be split into three elements.
Weekly pay – capped at £538 for employees made redundant on or after 6 April 2020.
Age factor – employees will receive:
a. Half a weeks pay for each full year they were under 22;
b. One weeks pay for each full year they were 22 or older but under 41;
c. One and a half weeks pay for each full year they were 41 or older.
Length of service – capped at 20 years service.
It will then be calculated in accordance with the following formula: (weekly pay (capped) x age factor) x length of service.
For assistance with calculating redundancy pay please contact us.
Contact KLG Law
For advice on your redundancy situation, our team of specialist employment solicitors can help. For more information about the redundancy process in the UK and employment law legal advice, contact our team on 0330 221 0684 or contact our legal team online.
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