In today's evolving employment landscape, understanding how to properly manage redundancies is crucial for businesses.
In our latest episode of The Employment Law Podcast, Eleanor Rogers and Catherine Wilson—senior associate and partner from Constantine Law respectively—share some valuable insights on redundancy processes, settlement agreements, and upcoming legislative changes. Here are the key takeaways for employers.
What counts as redundancy?
A common misconception is that redundancy is just a convenient label for dismissal. However, it has specific legal requirements—typically involving either a disappearing job role or workplace closure. Importantly, not every element of the role needs to disappear for a legitimate redundancy situation to exist.
The crucial role of consultation
The scale of proposed redundancies determines the consultation requirements. The key triggers are:
Less than 20 redundancies: Individual consultation required
20-99 redundancies: Collective consultation required (minimum 30 days)
100+ redundancies: Extended collective consultation required (minimum 45 days)
When counting affected employees, employers must consider a 90-day window both before and after the proposed dismissals. Catherine advises erring on the side of caution: "If you're around the 19 or 18 mark, always assume that it might go up to 20 or more."
Consultation and privilege: A delicate balance
While discussions with legal advisors are protected by legal privilege, internal communications about redundancy plans can be discoverable in tribunal proceedings.
This means documentation like initial selection lists or detailed plans should be handled with care. The consultation process must be genuine and open to change—overly rigid plans could suggest a predetermined outcome.
A word on selection criteria
Selection processes often face scrutiny in tribunals. Key considerations include:
Using objective rather than purely subjective criteria
Ensuring criteria don't discriminate against protected characteristics
Taking special care with employees on maternity leave or with disabilities
Being mindful of previous grievances or whistleblowing
Settlement agreements (and grenades)
Settlement agreements require careful handling. As Catherine notes, they're "like grenades - superficially simple but with many traps for the unwary."
Key considerations include:
Ensuring agreements are up-to-date with current legislation
Properly introducing agreements through either protected conversations or without prejudice discussions
Allowing adequate consideration time (typically 10 days minimum)
Taking extra care with vulnerable employees
What’s next? The Employment Rights Act 2025
Significant changes are coming with the new Employment Rights Act, including:
Removal of the "establishment" test for collective consultation
Enhanced union access to workplaces
Stricter regulations around "fire and rehire" practices
Potential increases to protective awards
The time to take action is now
With these changes on the horizon, employers should:
Review current contracts and procedures
Consider establishing formal employee consultation bodies
Ensure redundancy processes are robust and documented
Seek expert advice when handling complex cases
The employment landscape is evolving rapidly, but with proper planning and expert guidance, organisations can successfully navigate these changes while protecting their interests and employees' rights.
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