| Acas

1 . 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 proposals 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 proposing 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 propose 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 propose 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 propose 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 proposals 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

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.

Example of when collective consultation might be needed

An accountancy firm of 100 employees is suffering losses. They need to make 25 redundancies in the next couple of months. The employer identifies 30 employees at risk of redundancy.

Because they're proposing 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.

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.

Find out how to notify the government of potential redundancies on GOV.UK

2. When to begin consultation

You must not decide on any redundancies before holding collective consultation.

There should be enough time to consult employees and their representatives, and include any of their suggestions you agree to.

You must start consultation for:

20 to 99 redundancies – at least 30 days before
100 or more redundancies – at least 45 days before

It's a good idea to start earlier wherever possible, to make sure you meet consultation requirements.

How long consultation lasts

There are no rules for how long consultation must last. But you should check if you have a policy or agreement in place that does have rules.

It can last longer than the minimum periods listed above if it's a large or complicated redundancy situation.

You do not need to reach agreement to end consultation. But to reduce the risk of unfair dismissal claims, you need to show that the consultation was genuine and that you aimed to reach agreement.

You must be able to show that you've listened to your employees and that you responded to questions and suggestions.

Consulting individual employees

You should hold collective consultation first before holding individual consultation.

You may need to be flexible about how you arrange consultation, as there may be situations when you need to run collective and individual consultations at the same time.

Example

An employer has agreed with employee representatives how many employees will be made redundant and how they'll be selected. But they’re still consulting with them about other redundancy-related issues.

In this situation, it may be appropriate to start individual consultation with the affected employees.

Find out more about consulting individual employees.

3. How to hold consultation

Consultation should include:

open and honest conversations about the redundancy process
considering other options with employees and their representatives

You should discuss and ask for their ideas on:

your planned changes
ways to avoid or reduce the redundancies
how to reduce the effect of the redundancies
how employees are selected for redundancy
how the business or organisation can restructure or plan for the future

Employees will often have good ideas that may help to avoid redundancies. You do not have to agree to their suggestions, but it's important to seriously consider any ideas that could reduce redundancies, otherwise employees could claim the redundancy process has been unfair. It's important to document all discussions and the reasons for your decisions.

Find out more about individual consultation

Consult trade union or employee representatives

When collective consultation is needed, by law you must consult any recognised trade union. If there’s no trade union, you must consult employee representatives.

Electing employee representatives

To get employee representatives in place, you need to set up an election process.

There may already be an agreement that gives existing employee representatives the right to represent staff in redundancy situations. For example, an information and consultation agreement.

Employee representatives can be elected specifically for the consultation, but you may need to provide training for the role.

So that the election process is fair, you must make sure:

employees who stand for election are affected by the redundancy when the election takes place
affected employees are not stopped from standing for election
affected employees are given the right to vote for employee representatives
affected employees can vote for as many candidates as there are representatives to be elected – or as many candidates as there are representatives in their group, if there'll be representatives for particular groups of employees
votes can be made secretly and counted accurately
there are sufficient employee representatives elected to represent the interests of all affected employees

You should also consider how long employee representatives will be elected for – they must have enough time to provide relevant information and complete consultation.

You should make sure there are enough representatives so that if one is not able to attend a meeting, for example they’re off sick, there will still be representation.

If nobody wants to be elected as an employee representative, you should consult with the affected employees directly. This should be a last resort.

Consulting representatives

You must provide trade union or employee representatives with the following in writing:

why you need to make redundancies
how many redundancies you're considering
roles at risk of redundancy (in a 'selection pool')
your current ideas for how to select employees for redundancy
your planned timeframes
how you'll calculate redundancy pay
if you're using agency workers, how many, where they're working and the type of work they're doing

Consultation includes:

arranging regular meetings
being as open as possible
listening to views
genuinely considering suggestions
finding ways to avoid or reduce redundancies
deciding on the best way to select employees
getting support for affected employees
deciding what should be included in redundancy packages

You should encourage employee representatives to speak on behalf of employees.

Representatives need to be able to:

tell employees about the proposals and share information
ask employees for their views, suggestions and any questions they may have
talk to other representatives and work out a collective staff response
meet with management and give feedback on the staff response
engage in open discussions to solve problems and reach agreements
tell employees the outcome of consultations

The rights of trade union and employee representatives

By law, trade union and employee representatives have the right to:

reasonable paid time off for trade union duties
reasonable time off for training
reasonable access to employees and workplace facilities

You must not dismiss someone or treat them unfairly because they’re a trade union or employee representative.

Find out more in the Acas Code of Practice on time off for trade union duties and activities.

4. Failure to consult

If an employer does not meet consultation requirements, employees can make a claim to an employment tribunal.

If the claim is successful, the employer may have to pay the employee or employees compensation (a 'protective award'). This can be up to 90 days' full pay for each affected employee.

Special circumstances

In extremely rare circumstances it may not be reasonably practical for an employer to collectively consult. In which case, the employer may be able to use a 'special circumstances' defence.

The employer would need to be able to prove it was not reasonably practical for them to comply with the consultation requirements. But they would still need to inform and consult employees as much as possible.

Special circumstances are not defined in law and each situation is considered on a case-by-case basis by the employment tribunal judge. Special circumstances are truly unexpected situations.

Employers who think it may not be reasonably practical for them to comply with consultation requirements should get legal advice.

Example of a special circumstance

If an employer suddenly and unexpectedly becomes insolvent, an employment tribunal might accept it’s a special circumstance. But if an employer knew they were having financial difficulties for some time and did not meet consultation requirements, it may not be accepted as a special circumstance.

5. Follow the redundancy steps

You can only give an employee notice of redundancy once you've finished consulting everyone.

You should now follow the next steps in making redundancies.