It's the law: Redundancy, part three: large-scale dismissals

Failure to carry out appropriate consultation could lead to a significant fine.

The previous article in this series on redundancy considered how to consult individuals over potential redundancies. This article concentrates on a charity's obligations when larger numbers of employees are involved.

When 20 or more redundancies are proposed at one establishment within a 90-day period, consultation must begin at least 30 days before the first dismissal takes effect.

When 100 or more are proposed at one establishment within a 90-day period, consultation must begin at least 90 days before the first dismissal takes effect. In both cases, the employer must send written notification of the proposed redundancies to the Department of Trade and Industry.

The employer must consult appropriate representatives of the affected employees about the proposed dismissals. These individuals will be trade union representatives, if a union is recognised. If there are no union representatives, they will be employee representatives who were elected for other purposes. Alternatively, employee representatives can be elected.

An employer will have to discuss ways of avoiding the dismissals, reducing the number of dismissals and mitigating the consequences of the dismissals. Consultation must be undertaken with a view to reaching agreement with the appropriate representatives. Notice of the redundancy cannot be given to the employees until consultation has been concluded, and that point can be specified by the charity.

If a charity fails to comply with any of the statutory requirements for consultation or fails to consult within the appropriate timescale, the employees' representatives may complain to the employment tribunal. A tribunal can make an award if a complaint is well-founded. The award will be whatever the tribunal considers just and equitable and can be the equivalent of up to 90 days' salary per employee.

Recent case law has held that the purpose of a protective award is to provide a sanction for breach of an employer's consulting obligations rather than to compensate employees. The starting point for a total failure to consult would normally be the maximum award of 90 days' pay. This will be cut only if there are mitigating circumstances.

My next column will look at the employer's obligation to consider offering potentially redundant employees other posts.

- Emma Burrows, a partner and head of the employment group at the employment group Trowers & Hamlins solicitors.

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