Redundancy consultation – make sure you get it right
Andrew Egan from Andrew Egan Associates Employment Solicitors answers legal questions
THERE are only about eight weeks to go until the furlough scheme is to be withdrawn.
Employers need to decide now what to do with employees who were placed on furlough. Some employers will be thinking about making redundancies, and if so, they will need to think carefully about the redundancy process.
If an employer intends to make 20 or more redundancies within a 90-day period, they must collectively consult with employees.
This requires nominating and electing employee representatives as well as consulting for a minimum of either 30 or 45 days depending on the number of employees affected.
It is therefore sensible to plan well in advance for such a significant undertaking.
This will help the process to go smoother and avoid timeconsuming and expensive employment claims.
If fewer than 20 employees are being made redundant within a 90-day period, an employer is obliged to consult with those employees affected. Employers must also give employees the opportunity to respond and comment on any proposals’ and, in addition, consider them for any suitable alternative vacancies.
If an employer fails to follow the correct procedures fairly, the employer risks unfair dismissal claims from those employees affected.
A recent example of an employer failing to follow a correct and fair redundancy consultation was in the case of Dolby v Stuart Plant Ltd. Mr Dolby started his employment with Stuart Plant Ltd as a business development manager on January 4, 2010, on a gross salary of £42,000. On November 2, 2018, he was called to a meeting with the managing director in the Holiday Inn in Peterborough for a ‘catch-up’.
Whilst walking back across the car park, Mr Dolby was informed out-of-the-blue that he was being made redundant.
He subsequently sent the company an email expressing his dismay and upset at being dismissed and requested payment of his annual profit share bonus.
The company said they would “be back soonest”.
In early January 2019, Mr Dolby sent a letter to the company as part of a grievance against a director, and he also challenged the legality of his dismissal letter and the dismissal itself.
There had been no discussion with him about any potential alternative job roles. He did not receive a reply to his letter.
His solicitors wrote to the company in mid-January 2019 and the company eventually responded to a further letter from his solicitors in early February 2019, stating that the company would defend its actions if necessary.
Mr Dolby argued that he had been unfairly dismissed because of the manner of his dismissal – there had been a failure to offer him suitable alternative employment; the decision had already been made to dismiss him before he was ‘consulted’; and his employer had lied about offering him suitable alternative employment.
The employment tribunal held that Mr Dolby had been unfairly dismissed due to a lack of meaningful consultation or offer of suitable alternative employment.
The company attempted to disguise the unfairness of their actions by painting a picture of Mr Dolby having performance and attendance issues, but produced no evidence to support this.
The company also claimed that an offer of suitable alternative employment was made to Mr Dolby, which also turned out to be untrue.
There had been no meaningful consultation with him, but rather a cruel and unfeeling comment made in a car park which ended his employment. The employment tribunal awarded £42,000 to Mr Dolby in compensation.
This case illustrates that a failure to consult or to consult meaningfully and fairly is potentially very costly for an employer.
Any individual can claim compensation for unfair dismissal, and an employee can be awarded a ‘protective award’ of up to 90 days full pay where 20 or more employees are being made redundant. Make sure your business plans ahead for redundancy and conducts a fair consultation with those employees affected. You should also take legal advice before embarking on a redundancy process.
For advice call Andrew on 07904 391756 or (01635) 890560.