The Importance of Consultation during Redundancy

The recent case where ex-Woolworths staff received a whopping £67m compensation payout at an employment tribunal demonstrates the importance of consultation in a redundancy process.  In this case the administrators failed to consult the shop workers union on the redundancies and instead focused on trying to find a buyer.

The tribunal found the administrators of Woolworths had failed in their legal duty to consult the union with the result that over 24,000 former employees received a Protective Award of 60 days’ pay, capped at the statutory maximum of £330 a week that applied at the time.   It had been the view of the administrators that closures were inevitable therefore there was no genuine open minded consultation. Also the time allocated to consultation meetings was far too short which also demonstrated their opinion that redundancies were inevitable.
The judgement sends a clear message to employers for the price paid for failing to consult properly.  It is really important to carry out a fair and reasonable consultation process in good time before any dismissals take place.  A group consultation should announce the company’s proposals then be followed by individual consultation meetings.   When carrying out a collective consultation process with unions or employee representatives individual consultation needs to take place as well.
During individual consultation employees need to know the selection criteria applied and how they have been scored and at the same time be given the opportunity to discuss ways to avoid redundancy. They should be gven the opportunity to suggest ways of avoiding redundancy.  The employer may have alternative employment opportunities available in the company which should be discussed with the employee explaining how the roles can be applied for.  Employees need to fully understand the redundancy process and it should not be rushed at all.
Employers should keep a paper trail to show that full and meaningful consultation has taken place, which includes letters and notes from all the meetings.
More information can be found on the ACAS website