HR 15 August 2018

High street closures put employers? redundancy obligations in the spotlight

business insolvencies
Around 50, 000 high street jobs are estimated to have been lost in 2018
As Homebase becomes the latest high street retailer to announce store closures and job losses, Jo Stubbs, head of product content strategy at XpertHR highlights the five most common mistakes employers make when handling redundancies and gives her guidance on what companies should be doing in this situation.

Retail and restaurant closures continue to sweep across UK high streets, with Homebase, House of Fraser, Toys R Us, Prezzo and Byron Burgers among the latest well-known brands to suffer.

With more and more businesses facing closures, what five mistakes do employers commonly make when handling redundancies?

  1. Starting collective redundancy consultation too late

All too often, employers start collective consultation far too late in the day, typically because those at the top retain hope that business will improve or do not see informing staff that the business is in trouble as a priority.

Employers? collective redundancy consultation obligations are triggered once they are proposing to make 20 or more redundancies at one establishment”, which might be a single store or restaurant, within a period of 90 days or less.

Consultation must begin in good time? and in any event at least:

  • 45 days before the first dismissal is to take effect, if 100 or more employees are affected at the same establishment; or
  • 30 days before the first dismissal is to take effect, if 20 to 99 employees are affected at the same establishment.
The collective consultation should be completed before the employer provides employees with notices of termination of employment.

  1. Not conducting a meaningful redundancy consultation

Employers frequently see the process of consulting with staff over redundancies as a box-ticking exercise and fail to understand that there should be a genuine dialogue about the proposals.

Union representatives must be consulted about ways of avoiding redundancies, reducing the number of redundancies, and mitigating the consequences of redundancy.

Overall, employers must approach the consultation with an open mind and be prepared to consider employees? views. If ways of avoiding or reducing the number of redundancies are put forward, these should be properly considered and not dismissed out of hand.

  1. Not informing and consulting on an individual basis

Individual consultation with employees remains essential, even where the employer’s obligation to consult collectively has been triggered.

Individual consultation involves the employer explaining to each employee the basis on which he or she has been provisionally selected for redundancy, and giving the employee the opportunity express his or her views, raise any questions, and discuss any alternatives to redundancy.

As with the collective consultation process, a meaningful individual consultation process must be concluded before an employee is provided with notice of termination of employment.

An employer that serves notice prior to completing an individual consultation puts itself at risk of an unfair dismissal finding in any subsequent employment tribunal claim, on the grounds that the process was a sham and the redundancy predetermined.

  1. Not looking out for alternative employment for redundant employees

One of the most significant things that an employer can do to minimise the inevitable unfairness for a redundant employee is to determine if there are any vacancies that would be suitable for him or her.