Consultation on Redundancy

14 11 2008

This is becoming a hot topic again in view of the number of large scale redundancies we are now seeing – 3,000 at RBS and 10,000 at BT announced just this week.  I’m seeing more and more people with compromise agreements seeking advice on their situations, as you might expect.  However, in some cases, the employers are not consulting with their employees at all, but are simply telling them that they will be made redundant and then showing them the door.  This should not happen and can lead to employers unfairly dismissing the employees treated in this way.  If this happens to you you may be able to argue that you have been unfairly dismissed.

Different rules apply depending upon how many employees are being made redundant at any one time and whether there is a recognized Trade Union involved. If within a 90 day period more than 20 people at one “establishment” are to be dismissed, then the employer is under a statutory duty to consult with the affected employees.  At least 30 days consultation must take place before the redundancies occur and that increases to 90 days if 100 or more employees are placed at risk.

Many employers will stage the redundancies to avoid the need to consult in this way.  However, they cannot escape the need to consult at all and must follow (until repealed next April) the statutory disciplinary and dismissal procedures introduced in 2004. Failure to consult in individual cases can lead to a finding of automatically unfair dismissal against the employer and a potential increase in the compensatory award made by an Employment Tribunal (ET). If an employer fails to follow the collective consultancy provisions then an ET can make a “protective award” for failure to consult.  That can be 30 days or 90 days’ salary. 

If a Union is involved then the employer must consult with the union’s representatives.

Since the 6th April 2008, employees of businesses with more than 50 employees are entitled to request their employer to tell them about and consult with them on business issues which affect them.  The Information and Consultation of Employees Regulations 2004 stipulate that if ten percent of employees request it, the employer must set up a system of consultation and information.   If an employee makes that request and is sacked for it, it will be treated by an ET as automatically unfair dismissal.


Please call me on 0207 464 8433 or at




This column will appear in the “Docklands” and “Peninsula” newspaper week commencing 17th November 2008.




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