Managing staff redundancies: step by step

Step 2: Hold redundancy consultations

Consultation is when you talk with employees and their representatives to explain your planned changes and get their feedback and input.

Consultation must be 'meaningful' – this means you must get their feedback and input, and seriously consider their proposals.

You'll need to follow 'collective consultation' rules if you're planning to make 20 or more employees at the same workplace redundant within 90 days. This means you must consult with any recognised trade union or employee representatives.

If a collective consultation has already started on a separate redundancy situation in the same organisation, those affected by the proposed redundancy do not have to be included in a new redundancy proposal. But you should not stagger redundancies to avoid consultation.

During the coronavirus (COVID-19) pandemic, you must still consult your employees. You may need to do this remotely. There is no legal requirement to consult face to face.

Consulting with employees

You must discuss your planned changes with each employee who could be affected. This can include employees who are not actually losing their jobs.

You must talk with each employee individually to explain changes and get their ideas and feedback. The meeting can take place over the phone if you both agree to it and there is a clear need, for example if someone works remotely.

Your plans must not be finalised at this stage and you should aim to include any employees' suggestions or ideas you agree with.

Download a letter template for inviting an employee to a consultation meeting.

Consulting with trade unions or employee representatives in large-scale redundancies

If you're planning to make 20 or more employees at the same workplace redundant within 90 days (large-scale or 'collective' redundancies), you must follow 'collective consultation' rules.

This means you must consult any recognised trade union or if there is not one, you must consult employee representatives.

To make sure you consult with the relevant representatives, you must identify the employees at risk of redundancy and who will represent them in the consultation.

Employees can elect employee representatives specifically for the consultation but you may need to provide training for the role. Or there may be an agreement in place which means an existing group of employee representatives have a remit to consult with the affected employees. For example, you may have an information and consultation agreement.

You should also consult employees individually.

Consulting individual employees in a large-scale redundancy

You may need to be flexible about how you arrange individual consultation.

Some organisations wait until collective consultation has ended before consulting individual employees who may be at risk of redundancy. But there may be situations when it's appropriate to run collective and individual consultations at the same time.

An employer has agreed with employee representatives how many employees will be made redundant and how they'll be selected. But they are still consulting with them about other redundancy related issues. In this situation, it may be appropriate to start individual consultation with the affected employees.

If an employer does not collectively consult 

By law, an employer must collectively consult when they make large-scale redundancies. 

If an employer does not meet consultation requirements, employees can make a 'protective award' claim against their employer to an employment tribunal. If the claim is successful, the employer may have to pay up to 90 days’ full pay for each affected employee.

In some exceptional circumstances it may not be reasonably practical for an employer to collectively consult. An employer may be able to defend a protective award claim by using a 'special circumstances' defence.

Proving special circumstances 

An employer will need to be able to prove it was not reasonably practical for them to comply with the consultation requirements. But they should still try 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. Special circumstances are truly unexpected situations. 

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.   

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

If employee representatives need to be elected

If there is no recognised trade union, you may need to elect employee representatives. You must make sure the election process is fair when employees elect employee representatives. 

You must make sure:

  • employees who stand for election are affected by the redundancy when the election takes place
  • affected employees are not unreasonably excluded 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. 

In some situations, elected employee representatives may not be able to represent affected employees. For example, because they’re no longer working at the organisation or because they’re off sick. If this means the affected employees are underrepresented, you should hold a new election and make sure the election is a fair process. 

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

The role of employee representatives in redundancy consultations

Employee representatives take part in collective consultation meetings by: 

  • considering ways redundancies can be avoided or reduced
  • discussing the proposed method for selecting employees 
  • discussing what support should be provided to the affected employees and what should be included in a redundancy package

Employee representatives need to be able to:

  • understand your proposals
  • understand the main legal requirements 
  • 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 constituent employees and workplace facilities

You must not dismiss someone or treat them unfairly (cause them 'detriment') 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 (PDF, 749KB, 48 pages).

How to consult

There are set rules for collective redundancies which you must follow. There are no set rules for consultations with fewer than 20 redundancies but it's good practice to follow the same process.

Download the Acas guide to handling large-scale redundancies (PDF, 522KB, 64 pages).

An employment tribunal could accept a claim for unfair dismissal if you cannot show you've consulted an employee or employee representatives.

You must consult any employees who are on maternity leave.

Prepare for the consultation

You should get the information ready that you're going to share.

During the consultation period you must let employees or appropriate representatives, for example a trade union or elected employee representative, know in writing:

  • why you need to make redundancies
  • the number of employees and which jobs are at risk
  • how you will select employees for redundancy
  • how you plan to carry out the redundancies, including timeframes
  • how you will calculate redundancy pay
  • if you're using agency workers, how many, where they’re working and the type of work they're doing

You should also have:

  • a trained person to lead the consultation
  • a clear way of presenting your redundancy plan
  • a questions and answers document

You can get Acas training on managing redundancies.

When to begin your consultation

It's important you do not present a finalised redundancy plan to your employees. You must leave enough time to consult them and include any of their suggestions you agree to.

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

When to begin consultation depends on the number of redundancies.

You must include in your total:

  • voluntary redundancies
  • employees you’re moving into other roles

You only need to include employees who are on fixed-term contracts if you're making them redundant before the end of their contracts.

Fewer than 20 redundancies

There is no set time period for how long consultation should last before giving redundancy notices.

20 to 99 redundancies within 90 days in 1 workplace

You must begin consultation at least 30 days before any dismissals take effect. But it’s a good idea to start earlier to make sure you meet consultation requirements.

100 or more redundancies within 90 days in 1 workplace

You must begin consultation at least 45 days before any dismissals take effect. But it’s a good idea to start earlier to make sure you meet consultation requirements.

When it’s possible to give employees notice earlier

In some situations you may meet your consultation obligations before the minimum period has passed. 

If you’re confident you’ve finished consulting everyone and no further meaningful consultation is possible, you can give employees earlier notice of redundancy or dismissal. 

But if you make any dismissals, you must make sure the person’s contract ends after the minimum period has passed.

Tell the government about collective redundancies

By law, you must let the Redundancy Payment Service (RPS) know your plans before the consultation starts.

Fill in the HR1 form on GOV.UK and send it to the RPS address on the form.

The RPS acts on behalf of the Secretary of State for the Department for Business, Energy and Industrial Strategy (BEIS).

You can be fined if you do not notify the RPS.

If there has been a business transfer (TUPE)

If there are redundancies after a business transfer (TUPE), consultation can start before the transfer and continue after. But you should not select employees for redundancy before the transfer takes place.

Find out more about TUPE.

How long the consultation lasts

There are no rules for how long the consultation should last. It can last longer than the minimum periods listed above if it's a large or complex redundancy situation.

You do not need to reach agreement for the consultation to come to an end. You simply 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.

What to discuss during the consultation

Consultations allow you to explain to employees why you're planning redundancies.

You must discuss with employees:

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

You must consider and respond to any suggestions made by employees. You can reject any ideas you do not think are reasonable but you should explain why. It's important to document all discussions and the reasons for your decisions.

You might not always be able to avoid redundancies but by working with employees you'll often be able to save jobs and come away with a better idea of how your business can plan for the future.

Information that should be shared

You should be as open as possible with unions and employee representatives. This will allow employees to feel part of the conversation.

Not providing enough information often leads to frustration and mistrust and can sometimes mean the consultation is invalid.

You should aim to provide the right level of detail for staff to understand your proposals. The information should not be so long or complex that a specialist is needed.