Collective Redundancy: Employer's Guide to Large-Scale Redundancies

Collective redundancy has strict legal requirements. Getting the process wrong can result in substantial protective awards on top of redundancy pay.

When Rules Apply

The Threshold

Collective redundancy obligations arise when:

• Proposing to dismiss 20 or more employees
• As redundant
• At one establishment
• Within a period of 90 days or less

"Proposing to Dismiss"

Wide interpretation:

• When you contemplate redundancies
• Not just when decided
• Includes planning stages

"One Establishment"

Usually:

• One site/location
• Local unit of employer
• Not the whole company

Courts interpret broadly - err on the side of caution.

90-Day Period

Rolling window:

• Look forward and backward
• All redundancies in any 90-day period
• Phased redundancies may still trigger

Minimum Consultation Periods

Before First Dismissal Takes Effect

Number of Redundancies	Minimum Consultation
20-99	30 days
100+	45 days

This is before first dismissal takes effect - not before notice is given.

Practical Timing

With 45-day consultation + 12-week notice:

• Start consultation
• 45 days later, give notice
• 12 weeks later, employment ends

Plan backwards from when you need people to leave.

Who to Consult With

Hierarchy of Representatives

1. Recognised trade union (if one exists)
2. Existing employee representatives (if appropriate)
3. Specially elected representatives
4. Direct with employees (only if election not reasonably practicable)

Election of Representatives

If no union or existing reps:

• Invite nominations
• Hold election
• All affected employees can vote
• Sufficient representatives elected
• Must be employees

Representative Requirements

Elected representatives must:

• Be affected employees
• Have access to affected employees
• Have facilities to perform role
• Be protected from detriment

What to Consult About

Statutory Topics

Must consult about:

1. Ways of avoiding the dismissals
2. Ways of reducing the numbers
3. Ways of mitigating the consequences

Information to Provide

In writing:

• Reasons for proposals
• Numbers and descriptions of affected employees
• Total number of employees of that description
• Proposed selection method
• Proposed dismissal procedure
• Proposed method of calculating redundancy payments

Timing of Information

Provide information:

• At start of consultation
• Allow representatives time to consider
• Before any decisions made

Consultation Duties

"In Good Time"

Must begin "in good time" - interpreted as:

• Before decisions made
• With genuine opportunity to influence
• Not a fait accompli

"With a View to Reaching Agreement"

Must genuinely engage:

• Consider proposals from representatives
• Respond to suggestions
• Not just go through motions
• Document discussions

What Good Consultation Looks Like

• Explain business case
• Share relevant information
• Listen to alternatives
• Consider proposals seriously
• Respond to representations
• Explain decisions

Government Notification

HR1 Form

Must notify Redundancy Payments Service:

• When proposing 20+ redundancies
• Using form HR1
• Online submission preferred

Timing

Redundancies	Notification Period
20-99	At least 30 days before first dismissal
100+	At least 45 days before first dismissal

What to Include

• Employer details
• Establishment address
• Numbers affected
• Proposed dates
• Reason for redundancies
• Consultation status
• Union involvement

Consequences of Failure

• Criminal offence
• Fine up to £5,000
• Per failure to notify

Protective Awards

What Are They?

Compensation for failure to consult properly:

• Up to 90 days' gross pay
• Per affected employee
• On top of redundancy pay

When Awarded

Tribunal may award if employer failed to:

• Consult in good time
• Consult for minimum period
• Provide required information
• Consult properly
• Elect representatives

Calculation

• Based on actual loss? No
• Punitive element
• Maximum 90 days' actual pay
• No cap on weekly amount
• Reduced for partial compliance

Who Can Claim

• Trade union (for members)
• Employee representatives
• Individual employees (if no reps)

Special Situations

Insolvency

If company insolvent:

• Consultation still required
• But "special circumstances" may apply
• Administrator may proceed faster
• Still should consult where possible

"Special Circumstances"

Defence if it wasn't reasonably practicable:

• Must show what circumstances
• And what steps you took
• Courts interpret narrowly
• Insolvency alone not enough

Commercial Sensitivity

If information is sensitive:

• Can be provided confidentially
• Representatives must respect confidentiality
• But can't withhold essential information

Timing Example

100 Redundancies Scenario

Planning:

• Board decision to restructure
• Consider alternatives
• Plan consultation

Day 1: Begin consultation

• Notify HR1
• Provide written information
• Meet with representatives

Days 1-45: Consultation period

• Regular meetings
• Consider alternatives
• Individual consultations in parallel

Day 46: Issue notice (12 weeks)

• If consultation complete
• Notice to affected employees

Day 130: Employment ends

• Redundancy payments due
• (46 + 84 days = 130)

Common Mistakes

Starting Too Late

Consultation must be meaningful:

• Before final decisions
• With real chance to influence
• Not after announcement

Inadequate Information

Must provide all required information:

• In writing
• At start
• Sufficient detail

Treating as Formality

Consultation must be genuine:

• Listen to proposals
• Consider alternatives
• Explain why rejected

Wrong Representatives

Must consult with right people:

• Union first if recognised
• Proper election if needed
• Can't just pick people

Miscounting

Easy to get wrong:

• Include all redundancies
• Check 90-day windows
• Consider all establishments

Individual Consultation

Alongside Collective

Individual consultation still needed:

• For fair dismissal
• Selection application
• Personal circumstances
• Alternative employment

Don't Neglect

Collective consultation doesn't replace:

• Individual meetings
• Personal consultation
• Fair selection process

Documentation

What to Keep

• Board minutes on decision
• Consultation meeting notes
• Written information provided
• Representatives' proposals
• Responses to proposals
• HR1 copy
• Individual consultation records

Why It Matters

Evidence needed to show:

• Proper process followed
• Consultation was genuine
• Statutory requirements met

Checklist

Before Starting

• Count employees properly
• Identify establishments
• Check 90-day periods
• Identify representatives
• Prepare information
• Plan timeline

Starting Consultation

• Provide written information
• Submit HR1 form
• Arrange initial meeting
• Set meeting schedule
• Document everything

During Consultation

• Regular meetings
• Consider proposals
• Respond to representations
• Keep records
• Update information if changes
• Individual consultation parallel

Before Dismissals

• Minimum period elapsed
• Genuine consultation completed
• HR1 timing correct
• Individual consultation complete
• Selection process fair
• Notice given correctly