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Informing and consulting prior to redundancies

Updating author: Max Winthrop

Summary

  • Despite the familiarity of the concept of redundancy, the courts have periodically been unable to agree an appropriate test to determine whether or not a dismissed employee is redundant. (See Definition of redundancy)
  • This question is important because if an employee is redundant, he or she will have a statutory right to a redundancy payment and may also be able to claim unfair dismissal. (See Definition of redundancy)
  • The law recognises that redundancies, particularly on a large scale, cause employees distress. Accordingly, the Trade Union and Labour Relations (Consolidation) Act 1992 requires employers to inform and consult relevant union or employee representatives about their proposals before these are implemented. (See Duty to consult)
  • The consultations must continue for a specified period prior to any dismissals taking effect. (See Duty to consult)
  • If any affected employees belong to a grade for which no union is recognised, the employer must instead consult with employee representatives. If there are no appropriate "standing" representatives, then new ones must be elected. There are detailed provisions on the conduct of these elections. (See Which representation?)
  • Consultation must be undertaken "with a view to reaching agreement" and consequently with an open mind. Further, once collective consultation has concluded, employers should consult with the individual employees prior to confirming any dismissal. (See Meaning of consultation)
  • A failure to consult properly in accordance with statutory obligations will render an employer liable to pay affected employees a "protective award" to compensate for the lost opportunity to be consulted. The amount of any award is limited to 90 days' pay for each employee. (See Failure to consult: remedies)
  • Employers have a "special circumstances" defence to any claim for a protective award but only exceptional circumstances will justify failing to consult. (See Failure to consult: remedies)

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