The key stages of redundancy

Stage 1
Any alternatives?

Consider alternatives to redundancy first – redundancy should be the last resort. If you are an employee who has just been informed of possible redundancies, see our blog below on what to do when you get that call.

• Alternatives to redundancies – Top 10 tips for employers
• Changing terms and conditions: A viable alternative to redundancy
• What to do when you get that call – tips for executives at risk of redundancy

Stage 2
Collective consultation?

The statutory collective consultation obligations are triggered where an employer is proposing to dismiss 20 or more employees in one establishment within a 90 day period.

Period of consultation:

• 30 days if proposing to dismiss 20 to 99 people; or
• 45 days if proposing to dismiss 100 or more people.

The Secretary of State must also be notified (Form HR1).

• Download HR1 form

Stage 2.1
Employee representatives for collective consultation

Is there a recognised trade union? If so, the employer should consult with trade union representatives.

If not, does the employer have employee representatives who have authority from those employees to receive information and to be consulted about the proposed dismissals on their behalf? If yes, the employer should consult with them.

If not, the employer will need to arrange election of employee representatives – there are statutory rules on how this is done.

Stage 2.2
Collective Consultation

The minimum information and consultation obligations are set out in statute. See our blog on collective consultation below.

• Fair redundancies – Top 10 tips for employers: Part 2 – Collective Consultation

Stage 3
Selection

If the number of employees in a particular function/team is being reduced, a selection exercise will be required.

Employees in the pool must be scored against selection criteria. Those with the lowest scores will be selected for redundancy.

It is for the employer to establish the selection criteria. They must be objective to avoid exposure to allegations of discrimination.

Stage 4
Individual consultation

Employers must consult with individuals about their potential redundancy before final decisions are made.

Collective consultation is no substitute for individual consultation, so this needs to be done even in cases where collective consultation applies.

For further information on individual consultation, see our blog on this topic below.

• Fair redundancies – Top 10 tips for employers: Part 1 – Individual Consultation

Stage 5
Termination of employment

Is there an enhanced redundancy package on offer?

If so, employers could make this subject to signing a settlement agreement.

If you are a senior executive at risk of redundancy, see our blog on top 10 tips for negotiating an exit below.

• Top 10 tips for senior executives negotiating an exit

If you are working under a sponsored worker’s visa, or are an employer about to make redundant a sponsored worker, see our blog on the consequences of redundancy on sponsored workers.

• Lay off my visa – what happens when sponsored workers are made redundant: common questions answered