Redundancy consultation is a key part of a redundancy process which sees the employer consulting with a pool of employees about the potential redundancy situation. In this blog post, we’ll look at what “consultation” actually means, how you make sure you do it properly, and some useful information and pointers on how to undertake an effective redundancy consultation process.
This blog post does assume that you have a certain level of knowledge about the redundancy process, the terminology that relates to a redundancy process and the circumstances in which it may be appropriate. If you are new to redundancy then we’d suggest you read our guide to redundancy as a starting point. This guide will talk you through the whole process and help you become familiar with the different elements of redundancy.
The questions answered in this post are:
Redundancy is a complex process which has many opportunities to get things wrong and end up in an employment tribunal.
We strongly recommend you talk with an expert, preferably us, before starting a redundancy process.
1. What is Redundancy Consultation?
Redundancy consultation is a process that sees employers engage with their employees about changes they are proposing within the business.
Redundancy consultation is needed when one outcome of the proposed changes is that employees may need to leave the business on the grounds of redundancy.
2. What Do I Have to Consult About?
There are two key areas that you should consult on during a redundancy process.
The most obvious is the need to consult on the proposed changes that you are looking to make.
It could be that you are looking to reduce headcount or it could be that you need to make significant structural changes that could result in employees needing to leave the business.
You also need to consult on the process you plan to follow if you do end up needing to make employees redundant.
In a situation where there are multiple employees who are at risk of redundancy and some of those employees will stay with the business and some will leave, you should consult on the process that you are going to use to determine who stays and who goes.
It could be that you will be asking employees to apply for a position and if this is the case you should set out what the selection process will then be. Will you conduct interviews? If so, who will do those interviews? Will there be some other form of testing?
Be transparent so that employees know exactly what is likely to happen and have an opportunity to comment on the process.
3. When Should I Start Redundancy Consultation?
Under employment law, you should start redundancy consultation at a point where you have a proposal that is detailed enough to share but before reaching any decisions.
What this means in practice is that, if you are considering making changes in the business that may result in the need for employees to leave on the grounds of redundancy, you need to speak with employees about what you are thinking BEFORE you decide what to do.
The purpose of consultation is that you present your employees with details of the proposed changes that you are looking to make and give them an opportunity to comment and influence.
If you present them with a “This is what we are going to do” proposal then your consultation will automatically be void. Without consultation, any resulting redundancies could be classified as ‘unfair dismissal‘ under employment law.
You need to present employees with “This is what we are thinking of doing. What do you think?” They need to have a real opportunity to feed in to the considerations and influence the outcome.
4. What Information Do I Provide to Employees During Consultation?
The ideal consultation sees employers provide a detailed business case and supporting documentation to the employees at the very start of the process.
You should set out in as much details as you can, exactly what you are considering doing, why you are considering doing it and provide any evidence that you have to support what you are proposing.
As an example, if you need to reduce costs you would set out to the relevant employees how much cost saving you need to achieve, what alternatives to headcount reduction you have already considered and provide any financial information that is appropriate to support the fact that you need to reduce costs.
By providing employees with this information, you give them the insight that they need in order to make a meaningful contribution to the consultation process.
As mentioned above, you should also provide them with detail as to how you plan to undertake selection if that is something that may be necessary. In the answer to “What Do I Have to Consult About?” (above), we set out the information that you should share if you are proposing a selection process that will see people applying for roles.
An alternative approach is to use selection criteria. Here, you set out the key skills and behaviours that you want to retain in the business and then complete a scoring exercise where you score employees against these criteria. More on selection criteria and ‘pooling’ can be found in our guide for making redundancies.
If you are going to be adopting this approach, you should share the selection criteria with the employees, tell them how they are going to be scored and give them the opportunity to comment on the approach.
5. How Many Consultation Meetings Should There Be?
The number of meetings will depend on the complexity of the situation you are managing. As a minimum, you should have two individual consultation meetings, and, really, we would suggest three.
In the first meeting, you will present any impacted employees with the proposal and information. They are unlikely to have much to contribute in this meeting as they will have only just heard the news. You should then give them some time to digest what you have told them and look at the information which you have provided to them.
In the second meeting, they will present any ideas they have along with asking any questions.
We recommend the third meeting as this will then give you the opportunity to feedback on their suggestions and answer their questions.
6. What If the Employee’s Suggestions Won’t Work for the Business?
Something that we get asked quite frequently is “but what if the employees have ideas that won’t work? Won’t the company look bad for not implementing them?”
The answer is no. You are not obliged to implement any suggestions if they are not viable or right for your business.
During the consultation process it is possible that an employee will have an idea or suggestion that you have not already considered and that this idea removes or minimises the need for redundancy. This would be a fantastic outcome but in reality, it rarely happens.
It could be that employees have ideas or suggestions which are simply impractical or do not achieve the business aim.
In this case, your obligation is to demonstrate that you have given due consideration to what has been raised and to explain to the employee which it is not a viable alternative to your plan.
7. What If Employees Refuse to Engage with the Process?
You can’t force people to engage with consultation and there are circumstances in which employees simply want the process to be over, they don’t want to contribute to the discussion and really do not understand why they must.
In these circumstances, all you can do is encourage them to attend meetings and give them every opportunity to change their mind.
If you still have no luck getting them to engage, then do ensure that you communicate to them in writing that you have given them the opportunity to attend meetings but they have chosen to decline.
Explain in the same written communication (it can be on email or in a letter) that they can change their mind at any time, request a meeting if they wish and that you will share any relevant information with them in writing in the meantime.
Don’t make any assumptions in the process. Just because an employee does not attend one meeting, don’t assume they don’t want to attend others. Keep inviting them and trying to get them to engage.
8. How Long Should the Redundancy Consultation Last?
Unless you are undertaking large scale redundancies that require collective consultation, there is no set duration for consultation.
The duration of consultation will vary depending on the complexity and circumstances.
As a minimum, even for very straight forward redundancy situations, we recommend two weeks.
For more complex situations and for situations where you are undertaking selection, it’s likely that consultation will be three to four weeks.
Ultimately, don’t try to rush it. You don’t want to drag it out longer than you need to as that’s unfair for everyone. However, make sure that you only close consultation when you have considered all employee ideas and ideally, only after you’ve closed down all employee questions.
Manager’s Guide to Redundancies
Read our comprehensive guide to redundancies providing overview of redundancy requirements for UK employers and detailed insights into key activities and decisions.