Employment Tax

Collective redundancy ― overview

Produced by Tolley in association with Andy Williams at Charles Russell Speechlys LLP
  • 25 Oct 2021 14:14

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 as redundant within a 90-day period, statutory requirements for consultation apply. For information on the statutory consultation requirements and process, see the Information and consultation in collective redundancy guidance note.

There is also a useful booklet published by ACAS on how to manage collective redundancies.

Extra requirements in a collective redundancy process

As in individual redundancies, the employer should take steps to ensure that any dismissal

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

Think Tax.
Think Tolley.

Critical, comprehensive and up-to-date tax information

LEARN MORE LEARN MORE

Popular Articles

Isle of Man

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s

30 Nov 2021 09:21 | Produced by Tolley Read more Read more

Patent box tax regime ― overview

Introduction to the regimeThe aim of the patent box regime is to provide an incentive for companies to develop and retain patents and other qualifying intellectual property within the UK as part of the Government’s growth agenda. Finance Act 2012 originally introduced the legislation governing the

22 Dec 2021 16:12 | Produced by Tolley Read more Read more

Terminal trading loss relief

Terminal loss relief for trade losses in the final 12 monthsTrading losses incurred by a company in the final 12 months leading up to the discontinuance of trade may be carried back for up to three years from the period beginning immediately before that 12-month period. So if the final accounting

19 Oct 2021 23:04 | Produced by Tolley Read more Read more