When you must consult
Redundancy is usually a type of dismissal when a role is no longer needed. Before you select anyone for redundancy, you should hold a consultation.
Consultation means discussing and coming to agreement with employees on how the redundancy process will be carried out.
Collective consultation is where you must consult on your redundancy plans with any recognised trade union, or if there is not one, employee representatives.
By law, you must hold collective consultation where all of the following apply:
- you're planning 20 or more redundancies (dismissals)
- the redundancies are in one establishment – not necessarily in your organisation as a whole, which may be much larger
- you plan to make the redundancies within 90 days
It's still good practice to collectively consult even if the above do not apply to your situation.
You should also consult with employees individually.
If you have questions about collective consultation, you can contact the Acas helpline. You can speak to us at any point in the process. We can talk through any responsibilities and what you need to consider.
What counts towards the number of redundancies
When counting how many employees could be made redundant, be aware that:
- voluntary redundancies are included, for example if you plan to make 22 employees redundant but 6 of them volunteer for redundancy, you must still collectively consult
- those you're redeploying or moving to alternative roles are still included, for example if you plan to make 17 employees redundant and offer 5 employees alternative roles, the total number is 20 or more so you must still collectively consult
- anyone on a fixed-term contract that’s coming to the end of its agreed duration is not included
- if you've already started collective consultation on a separate redundancy situation, those already affected are not included
You should not stagger redundancies to avoid consultation. For example, by making several, smaller groups of staff redundant over a longer period of time.
If a claim is made to an employment tribunal, and the judge believes you staggered redundancies to avoid collective consultation, staff will be due compensation (a 'protective award').
Checking if it's a single establishment
Collective consultation applies when there are plans for at least 20 redundancies at a 'single establishment'.
A single establishment could be either an entire organisation, or a 'distinct entity' within an organisation. For example, it:
- manages its own workforce
- is reasonably permanent and stable
- can carry out the tasks it's assigned
- has its own technical means, equipment and organisational structure that allow it to carry out its function
Example of when collective consultation might be needed
An accountancy firm of 100 employees is suffering losses and needs to make big job cuts in the next month. The employer identifies 25 employees at risk of redundancy.
Because they're planning to make 20 or more redundancies in the same establishment within 90 days, they will need to hold collective consultation.
Example of when collective consultation might not be needed
A national retail company is refocusing its business to online, so decides to close 3 of their stores across England. The total number of employees at risk of redundancy across the 3 stores is 20 or more.
But because each store operates as a distinct entity from the wider business, the redundancies would be handled separately. This means the business might not need to hold collective consultation.
You should still consider collectively consulting staff even if you do not have to, as it helps to cover all options before making decisions.
If you're thinking of making 20 or more redundancies but are not sure whether they're in a single establishment, you should get legal advice.
If a case goes to an employment tribunal, the judge will consider whether the redundancies were in a single establishment.
Tell the government about collective redundancies
By law, you must inform the government's Redundancy Payments Service (RPS) about your planned redundancies.
You must do this before you issue any individual notice of dismissal, and at least:
- 30 days before the first dismissal, if there are between 20 and 99 redundancies
- 45 days before the first dismissal, if there are 100 or more redundancies
You could be fined if you do not notify the RPS.