Since 1st March 1996 employers have been under a statutory duty to consult appropriate representatives of employees about impending redundancies if at least 20 employees are being dismissed at one establishment within a 90 day period (TULRCA 1992, s.188(1) as amended by Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1995, SI 1995/2587). Consultation must begin in good time and in any event 30 days before the first of the dismissals takes effect or 90 days if 100 or more employees are to be dismissed.

From 1st November 1999 onwards if there is a recognised trade union the consultation must be with trade union representatives (Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1999, SI 1999/1925). Previously, until 31st October 1999, the law and definition of appropriate representatives was such that an employer could choose whether to consult trade union representatives or other employee representatives.

These rules implement the EC Collective Redundancies Directive 98/59/EC in Britain.

Failure to consult as required can lead to a Tribunal making a protective award unless there were "special circumstances which render full compliance not reasonably practicable" - see TULRCA 1992, s.188(7). However, it is not easy for an employer to take advantage of this escape clause (see Clarks of Hove Ltd v Bakers’ Union CA 1978 ICR 1076, which shows that insolvency alone is not a "special circumstance".

Whether or not there is a statutory duty on an employer to engage in collective consultation about impending redundancies in any particular case it is always essential that employers consult with and give advance warning to individual(s) who may be made redundant (see ACAS Handbook No 12 on "Redundancy Handling" and notes at ACAS/addresses, tel & fax nos for availability). Failure to do so will make it likely that a Tribunal would decide that any resulting dismissal(s) was unfair even though it was genuinely caused by redundancy ( for example see Alstom Traction Ltd v Birkenhead & ors EAT case 1131/00 on 10th October 2002 and Oakley v Merseyside Magistrates Court Committee 2003 EAT on 3rd February 2003 and see also notes at UNFAIR DISMISSAL/redundancy and unfair dismissal/redundancy dismissal being unfair dismissal ).

Consultation must be fair. In R. v British Coal and Sec'y of State for Trade and Industry ex p. Price [1994] IRLR 72, CA (and see R v British Coal etc ex p Vardy & ors 1993 ICR 720, QBD and Lambe v 186K Ltd, [2004] EWCA Civ 1045 on 29th July 2004) Glidewell LJ said at paras 24 and 25 that for consultation to be fair there must be:

"(a) consultation when the proposals are still at a formative stage;
(b) adequate information on which to respond;
(c) adequate time in which to respond;
(d) conscientious consideration by [the employer] of the response to consultation.

Another way of putting the point more shortly is that fair consultation involves giving the body consulted a fair and proper opportunity to understand fully the matters about which it is being consulted, and to express its views on those subjects, with the consultor thereafter considering those views properly and genuinely."

Case law shows that smallness does not justify failure to consult over impending redundancies but can justify less formal procedures than required from a larger employer (see de Grasse v Stockwell Tools Ltd [1992] IRLR 269, EAT).

Individual consultation is, of course, essential if the statutory duty to consult appropriate representatives of employees noted above does not apply. A dismissal by reason of redundancy will be unfair dismissal if the procedures required before an employee can be properly dismissed have not been followed (see Disciplinary procedures/2004 new regulations and for examples see Davies v Farnborough College of Technology EAT 2007 , reported at [2008] IRLR 14 and Slingsby v Griffith Smith Solicitors, EAT on 5th August 2008

go to next updated reference in this note.

There is a useful redundancy consultation booklet available from the DTI/BERR website (BERR Guidance on "Redundancy consultation and notification: guidance" (URN 06/1965Y)).

See also notes at Redundancy/consultation/trade unions and Consultation with employees/Information and Consultation regulations 2004 and generally at Implied terms in employment contracts/duties of employer , Codes of Practice and Polkey case . The government provides useful general information on the internet in regard to consultation rights of employees both in regard to collective redundacy (DTI webpage) and redundancy on business transfers (DTI webpage) .