In a recent update, we highlighted that on 6 April 2013, the collective redundancy consultation laws were amended to reduce the minimum collective redundancy consultation period from 90 to 45 days, where 100 or more redundancies are proposed at one establishment within a 90 day period, and to exclude the expiry of fixed term contracts from the obligation to collectively consult.

ACAS has now published non-statutory guidance on how to manage collective redundancies. The guidance is intended to help employers understand their legal obligations and sets out the principles and behaviours behind a good quality consultation, to help employers manage collective redundancies more effectively. The guidance uses the term “must” to signify a legal requirement and “should” to indicate good practice.

Key points include:

  • A focus on the benefits of good consultation, both for businesses and for the wellbeing of employees.
  • An explanation of when collective redundancies arise, including for example changes to terms and conditions of employment by way of dismissal and offer of re-engagement on new terms.
  • A timeline to highlight key stages in the process, including the interaction between collective and individual consultation, and a case study to bring the process to life.
  • A 10 point checklist to assist employers, including:
    • When consultation must commence. The new laws apply where the proposal to dismiss is made on or after 6 April. There will, therefore, be a transitional period where the old laws still apply, if the proposal to dismiss was made before 6 April 2013.
    • Guidance on what is meant by an “establishment”. ACAS acknowledges that this is a complex area but, following the thrust of the European case law, suggests relevant factors include:
      • is the workplace a distinct entity?
      • does it have a degree of permanence and stability?
      • does it have the ability to carry out the tasks assigned to it?
      • does it have a workforce, technical means and organisational structure that allow it to carry out its function?
  • Guidance on calculating the numbers of employees affected, for example including voluntary redundancies and redeployed staff, but not fixed-term contracts at their expiry date.
  • Who to consult, what information to provide and how to conduct consultation.
  • In a TUPE situation, ACAS suggests that, in some circumstances, the new employer can start collective redundancy consultation with the transferring employees before the transfer. This issue is currently the subject of consultation in relation to TUPE reforms and we may see clarification in the amended TUPE Regulations.
  • Confirmation that insolvency is not, of itself, a “special circumstance” which would provide a defence to a failure to consult. Only exceptional circumstances will fall within this exception.
  • There is no real guidance on the election of employee representatives or the holding of ballots, which may have been useful for employers due to the complex rules in relation to this.
  • ACAS suggests that employers consider developing a redundancy procedure. Examples of a redundancy procedure and selection matrix are included in the guidance.

The guidance provides very useful best practice guidance for employers contemplating collective redundancies. A copy of the guidance can be found on the ACAS website.