The importance of redundancy consultation

Posted on April 13th, 2022

The latest company to face public outrage and scrutiny is P&O Ferries, which recently made 800 seafarers redundant without any consultation. They further announced they would be replacing staff immediately with agency workers paid less than the minimum wage. The boss of P&O Ferries, Mr Hebblethwaite, admitted that his decision to dismiss 800 workers without consulting unions first was in breach of employment law. However, he believed that no union would have accepted his proposals and it had no alternative in order to continue trading. It was therefore easier to compensate staff in full instead. Subsequently, at the time of writing, the government plans to make it illegal for ferry firms to pay less than the minimum wage.

Collective consultation

Under s188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), where an employer proposes to make 20 or more employees redundant within a period of 90 days or less, it must consult on its proposals with elected representatives of the affected employees and notify BEIS. This includes dismissals following termination of contracts relating to a change to terms and conditions of employment and by reason of redundancy.

Protective award

Failure to comply with the above can result in a protective award of up to 90 days’ gross actual pay for each affected employee.

Consultation period

Consultation must begin in good time. Where 100 or more redundancies are proposed, consultation must begin at least 45 days before the first dismissal takes effect. For fewer than 100 dismissals, consultation must begin at least 30 days before the first dismissal takes effect.

Redundancy policy

Even in circumstances where fewer than 20 employees are redundant, it is important that schools follow the redundancy policy in place, which should contain individual consultation requirements with staff. However, it is good practice to consult with both staff and unions to enable unions to be kept in the loop with regards to any business proposals. Individual consultation is fundamental to the fairness of any dismissal. It is important that those affected fully understand the matters upon which they are being consulted and are provided with the opportunity to express their views and any alternative suggestions. A fair and thorough consultation process may also avoid the employee pursuing an appeal against their redundancy dismissal.

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