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Collective Consultation

Employers who fail to comply with their collective consultation obligations risk hefty financial penalties.

Employers proposing to dismiss as redundant 20 or more employees within 90 days or less must consult on a collective basis with representatives of affected employees. The process that must be undertaken is set out in the Trade Union and Labour Relations (Consolidation) Act 1992 and it must be fully adhered to.

Collective consultation is undertaken in broadly three stages. Firstly, an employer must normally identify who the ‘appropriate representatives’ of affected employees will be (micro businesses are exempt). Where a trade union is recognised in respect of affected employees the appropriate representatives will be representatives of that trade union. If there is no recognised trade union, or if a trade union is not recognised in respect of all affected employees it may be necessary to appoint employee representatives. TULCRA requires that this process be done by way of election and sets out detailed provisions as to how those elections must be handled.

Once the correct representatives have been identified or elected the employer must provide the representatives with certain information in writing including the reasons why dismissals are proposed, the number of employees affected and any selection criteria which will be used to identify which employees in any redundancy pool are to be dismissed. It will not generally be sufficient to provide this information to affected employees directly, the exception being where affected employees were invited to elect representatives but failed to do so within a reasonable period of time.

A period of consultation must then be entered into. Consultation should begin in good time and must last for a minimum period depending on the number of affected employees. If the employer is proposing to dismiss, as redundant, 20 to 99 employees consultation should begin not less than 30 days before the day on which dismissals are to take effect. If 100 or more employees are likely to be dismissed this period should last for at least 45 days.

It is important to note that there is no requirement for the consultation period itself to last for 30 or 45 days and the consultation period can permissibly last for less than these periods. Further, whilst no dismissal can take place within these minimum periods notice can be given during this time. This is subject to an overriding requirement that consultation must last for as long as is required to reach agreement or exhaust the possibility of agreement.

Where an employer fails to comply with TULCRA it risks claims brought by the appropriate representatives themselves, for a failure to inform and consult. These claims could result in ‘Protective Awards’ being made of up to 90 days’ pay per employee which can quickly add up to eye wateringly high sums especially if the number of redundant employees is high!

In addition to collective consultation obligations, where an employer is proposing to make 20 or more employees redundant it must notify the Secretary of State of that fact using form HR1. The notification must be given either 30 or 45 days in advance of the proposed redundancies taking effect. Failing to serve this notice is a criminal offence and an unlimited fine may be imposed.

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