UK Employment Law Update: Top ten tips on collective consultations

In the current economic climate, we anticipate that in 2023 many organisations will have to consider redundancies or a change to terms and conditions of employment in order to save costs.

Depending on the numbers involved, this may trigger a duty to collectively consult. Failure to  comply with such a duty can lead to employment tribunal claims for a protective award of up to 90 days’ gross pay for each affected employee. This is intended to punish the employer for not complying with its obligations.

As the consequences of getting it wrong can be significant, it is important to be aware of when the duty to collectively consult arises and what is required to comply with this obligation. We have set out below our top 10 tips.

1. Get the numbers right to identify whether the proposal will trigger collective consultation

An employer is obliged to collectively consult where it “is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less”.

It is important to remember that this includes not just redundancy dismissals in the traditional sense but also dismissal and re-engagement in relation to a proposed change to terms and conditions. Voluntary redundancies also count as dismissals for collective consultation purposes. However, dismissals due to the expiry of fixed-term contracts do not.

In most cases the “establishment” will be the place of work to which the employee is assigned (although determining the relevant “establishment” can be more difficult where, for example, employees work from home or between offices).

2. Consult with “appropriate representatives”

The obligation is to consult with “appropriate representatives” of the affected employees.

If you have a recognised trade union then you should be consulting with that trade union as the appropriate bargaining unit.

If you do not have a recognised trade union but you have an employee forum/standing body of employee representatives that have authority to act as employee representatives of the affected employees for the purpose of collective consultation, you may choose to consult with them.

Otherwise, you must arrange for the election of employee representatives. In doing so, you must ensure that every potentially affected employee is represented and so you will need to carefully consider the constituencies (if any) from which representatives are to be elected.

3. Train employee representatives

Where the employee representatives are newly elected and have not been through a similar process before, it can be helpful to provide training to them on the collective consultation process. This can help them understand and prepare for their role of representing affected employees.

Although there is no legal requirement to provide training, this can result in more engagement from the employee representatives and make the collective consultation process more effective.

Delivering training to employee representatives is something we often do for clients. If you would like to know more about this, please do get in touch.

4. Submit a HR1 form

You must complete and submit to the Redundancy Payments Service the ‘HR1 – Advance Notification of Redundancies form’ at least (i) 30 days in advance of the first dismissal taking effect where 20 to 99 dismissals are proposed within 90 days or less or (ii) 45 days in advance where 100 or more dismissals are proposed within such period. Failure to do so is a criminal offence which can result in an unlimited fine.

You must also provide a copy of the HR1 form to the employee representatives.

5. Issue the section 188 letter to employee representatives

Employers must provide the employees’ representatives with prescribed information set out in s188(4)) of the Trade Union and Labour Relations (Consolidation) Act 1992, which can be summarised as follows:

1. the reason(s) for the proposed dismissals;
2. the numbers and descriptions of employees whom it is proposed will be dismissed as redundant;
3. the total number of employees of any such description employed by the employer at the establishment in question;
4. the proposed method of selecting employees for redundancy;
5. the proposed method of carrying out the dismissals;
6. how redundancy pay awarded to affected employees will be calculated; and
7. whether you have agency workers within the business, the number of agency workers, where they are working and the type of work they are doing.

This letter kicks off the collective consultation process and should be sent to employee representatives by no later than 30 days or 45 days in advance of the first dismissal (depending on the number of proposed dismissals – see tip 4).

6. Be clear at the outset on your proposals and the business case for these

You should ensure that you’re clear at the outset of the business case for the proposed redundancies or proposed changes to terms and conditions. This will allow you to clearly set out the rationale in the section 188 letter and properly consult with employee representatives on this. The aim is to provide a cogent explanation, supported by relevant information, to allow the representatives an opportunity to understand what is being proposed and why.

7. Preparation is key

As part of the planning process it will be prudent to determine an outline timetable for consultation.

When timetabling, work backwards from the proposed date of termination of employment so that you can calculate when the HR1 and section 188 letter must be issued (as per tips 4 and 5 above).

Be prepared to apply some flexibility to the timetable in case of unexpected issues arising during the process. Several consultation meetings may be required depending upon how the consultation goes.

It is also advisable to draft up key documents and templates in advance. This could include a consultation pack for affected employees, template announcements and letters and outline scripts for consultation meetings.

8. Be mindful of the purpose of collective consultation and ensure it is meaningful

The purpose of the collective process is consultation “with a view to reaching agreement on ways of avoiding the dismissals, reducing the number of employees to be dismissed and mitigating the consequences of the dismissals.”

This does not mean that agreement ultimately has to be reached but consultation should continue until you have exhausted the possibility of trying to reach such agreement.

Consultation must commence in “good time” when the proposals are still at a formative stage and no decisions have yet been taken.

There has to be more than just an exchange of information, rather there should be genuine and meaningful engagement with employee representatives.

9. Don’t forget individual consultation

The requirement to consult collectively is not a substitute for the requirement to consult with individuals directly about how any decision affects them personally.

Failure to do so will almost certainly give an employee with 2 years’ qualifying service an unfair dismissal claim, even where collective consultation has taken place.

10. Don’t forget you might need to seek immigration advice.

When you are proposing any redundancies, redeployments or changes to terms, remember to consider whether immigration advice is required. For example, if you are making a sponsored worker redundant or making change(s) to their terms of employment, you must ensure you comply with Home Office sponsor licence reporting and recording duties.

By Burness Paull LLP, Scotland, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact ukscotland@transatlanticlaw.com

Disclaimer: Transatlantic Law International Limited is a UK registered limited liability company providing international business and legal solutions through its own resources and the expertise of over 105 affiliated independent law firms in over 95 countries worldwide. This article is for background information only and provided in the context of the applicable law when published and does not constitute legal advice and cannot be relied on as such for any matter. Legal advice may be provided subject to the retention of Transatlantic Law International Limited’s services and its governing terms and conditions of service. Transatlantic Law International Limited, based at 42 Brook Street, London W1K 5DB, United Kingdom, is registered with Companies House, Reg Nr. 361484, with its registered address at 83 Cambridge Street, London SW1V 4PS, United Kingdom.