Collective redundancies

A redundancy situation arises where:-

• There is a closure of the business
• There is a closure of part of the business e.g. a particular store or site
• There is a diminished need for the amount of employees carrying out work of a particular kind

Once an employer has established that there is a redundancy situation, then the next step is to consult with the employees. Consultation is fundamental to the fairness of any redundancy process. The consultation stage gives the employer the opportunity to be open with its employees about the risk of redundancy and why it has arisen and be open to considering other measures and listening to employee ideas. Consultation shouldn’t be a tick box exercise with redundancy already being decided as the outcome.

Where it is proposed to make redundant 20 or more employees at any one site within a 90 day period, then the employer is obliged to engage in collective consultation with a trade union. Where there is no trade union, employee representatives should be selected and consulted with.

A failure to consult in such circumstances also gives rise to a claim for a protective award of up to 90 days gross pay to one employee in addition to any unfair dismissal claim.

Where an employer is proposing to dismiss 100 or more employees from any one site within a 90 day period it must also notify the Secretary of State. A failure to notify the secretary of state is a criminal offence. This is a point which has been highlighted as a breach by P&O Ferries however different rules on notifying the Secretary of State apply where the redundancies relate to seafarers. The duty here arises where there is “a proposal to dismiss employees as redundant and the employees concerned are members of the crew of a seagoing vessel which is registered at a port outside Great Britain”. In such circumstances, “The employer shall give the notification required …to the competent authority of the state where the vessel is registered (instead of the Secretary of State”.

It is arguable therefore that P&O Ferries are not in breach of rules in respect of notification to the Secretary of State however questions surrounding their consultation process and the fairness of the redundancy remain questionable.