What are the rules for large-scale or collective redundancies? Employment Law

In some situations, an employer may need to make a large group of people redundant. This is known as collective redundancy. In the case of collective redundancies (20 or more employees) a clear redundancy plan should be in place to help manage the process.

What is the process for collective redundancies?

If an employer plans to make 20 more employees redundant within a period of 90 days, they must follow the normal redundancy procedure along with a collective redundancy consultation process.

In law, an employer must consult with all ‘appropriate representatives’ of those who may be affected by the proposed dismissals. These can be union reps or elected employee reps. The consultation process should seek to reach agreement about ways to:

  • Avoid dismissals
  • Reduce dismissals
  • Mitigate the consequences of the dismissals.

As in the normal redundancy procedure, each appropriate representative should be informed in writing of the reasons for the proposals, how many and who they are proposing to dismiss at redundancy across the business, the proposed selection criteria for dismissals, the proposed method and timescales, and how redundancy payments will be calculated.

Should an employer not follow the collective redundancy consultation process, they should be able to show that they have taken all reasonably practicable steps in the circumstances or else protective awards may also be given.

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