Collective redundancy ― overview

Produced by Tolley in association with Andy Williams at Charles Russell Speechlys LLP

The following Employment Tax guidance note Produced by Tolley in association with Andy Williams at Charles Russell Speechlys LLP provides comprehensive and up to date tax information covering:

  • Collective redundancy ― overview
  • Introduction
  • Extra requirements in a collective redundancy process
  • Timing
  • Who should the employer inform and consult?
  • Failure to comply

Collective redundancy ― overview

Introduction

Where an employer is proposing to dismiss as redundant 20 or more employees within a 90-day period, this may be classified as a collective redundancy.

In a collective redundancy situation, there are additional obligations on the employer in addition to the steps it should take in order to avoid having a dismissal by reason of redundancy treated as unfair (see the Individual redundancy guidance note for details of those steps). The additional obligations for employers making 20 or more employees redundant are set out in the Trade Union and Labour Relations (Consolidation) Act 1992, ss 188–198, and described below.

For the purpose of collective redundancy, every dismissal is treated as a redundancy except those that the employer can show are for one or more reasons related specifically to the individual concerned.

The guidance that has been provided by the courts for best practice in relation to the statutory requirements around collective redundancies is not set in stone but, in practice, it is often taken as a starting point by Employment Tribunals considering a dispute. As with individual redundancies, the requirements for a fair procedure will vary with current employment practice, the size of the employer, the number of redundancies to be made and all the other circumstances of the case.

Where an employer is proposing to dismiss 20 or more employees

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