Why it pays to stick to the redundancy consultation requirements
It is clear that the current Coronavirus pandemic is having the biggest impact on employment since the Oil and Gas downturn in 2007. As a result of these ever-changing times, and while facing the potential of mass redundancies, it may be tempting to gloss over consultation requirements. However, the recent Employment Tribunal decision of T Low & others v Jamie’s Italian Limited (In Administration) & others demonstrates that doing so could prove costly to the Employer.
When Jamie’s Italian Restaurants shut their doors in May 2019, more than 1,000 employees found themselves suddenly out of work. The employees were reportedly informed of the loss of their jobs in a 30 minute phone call. Legal action was then pursued in conjunction with Unite the Union on the basis that the employees were not afforded genuine and meaningful consultation.
In May of this year, an Employment Tribunal awarded compensation of eight weeks’ worth of wages to 70 former employees. The judgment noted that the Employer failed to comply with the consultation requirements outlined in section 188 of the Trade Union & Labour Relations (Consolidation) Act 1992. The Tribunal ordered that each former employee be paid 56 days of wages, backdated to 21 May 2019, the date of the first dismissals.
Bryan Simpson, Unite Organiser of Hospitality has stated that the outcome of this case “ought to serve as a warning to anyone considering mass redundancy without meaningful consultation.” It is clear that Employment Tribunals are not willing to tolerate failure to properly consult employees, even where the Employer has gone into administration.
The consultation period allows the Employer to explain the circumstances behind the redundancies and allows the employee to ask questions or raise concerns. All consultations must be meaningful and the Employer must be able to show that they have taken the employee’s proposals on board and given them serious consideration. Ideally, consultation will take place face to face or can be carried out over the phone if both parties agree. In the current circumstances, it is acknowledged that consultations are more likely to be held remotely.
The length of consultation will depend on the number of employees being made redundant. When a company is considering between 20 and 99 redundancies, the consultation period must begin at least 30 days before the first redundancy notice. If 100 or more employees are being made redundant, this period is increased to 45 days. The consultation can last longer than these minimum periods and there is no need to reach an agreement.
If you are considering redundancies, it is important to seek advice as soon as possible to ensure that you do not fall foul of the requirements and leave yourself open to potential challenge before an Employment Tribunal. For further information or advice, please contact our Employment Team on 01224 632464.