Redundancy-Consultation and Selection

Following our recent article on redundancies, we had a number of queries regarding large scale redundancies and the procedures an organisation has to follow. Several issues arose particularly in terms of consultation with employees, the impact of the Statutory Procedures and the selection of those to be made redundant.

If an organisation has more than 150 employees they should, ideally, already have a pre-existing agreement in place regarding consulting with their workforce and the provision of information to them. As best practice, and regardless of the size of the organisation, employers are advised to consult and inform their employees in connection with any proposed changes to the business on a regular basis. This has the advantage of not only obtaining valuable input from those who are at ‘grass roots’ level but also of making employees feel valued and involved.

In a large scale redundancy situation where it is contemplated that over twenty employees or more will be made redundant, an employer must hold consultation meetings – generally with employee representatives (that is individuals elected by their fellow employees) or trade union representatives. In these circumstances (and these only!) the Statutory Dismissal Procedures DO NOT have to be followed.

The law sets out a minimum consultation period. However, it is just that – a minimum. If more time is required because there are new or outstanding issues to be looked at then it is advisable to extend this period. Where possible, we would also recommend having at least one meeting with individual employees where concerns about their particular situation can be addressed. Their line managers can do these.

Where selection is to be carried out, ideally an employer should consult with employee/trade union representatives as to the selection criteria. Ultimately, however, an employer has to act in the best interests of the business in choosing criteria which will ensure retention of those employees most needed to move the business forward.

Selection criteria should be objective and capable of justification. Examples of fair selection criteria can include knowledge/skill, experience, performance and disciplinary records. Be wary of using attendance as a criterion as this could have an unfair impact on those employees who are disabled. If an organisation has a regular performance/appraisal system, this is an excellent way of assessing employees against the selection criteria. Individual meetings should then be held with employees (again, line managers can do these) to explain how an employee has scored, whether they have been selected for redundancy and to give them the right of appeal against the decision.

ACAS provides useful general guidance on redundancy handling which can be found on their website at www.acas.org.uk. If you require advice on your specific circumstances, please contact us.

February 2006

Deborah Boylan is a Partner who specialises in employment law - email: deborah.boylan@raworths.co.uk.