Collective redundancy ― overview

Produced by Tolley in association with Andy Williams at Charles Russell Speechlys LLP
Collective redundancy ― overview

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

Note: the case references in this guidance note are all subscription sensitive.

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 he 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 empl

There’s no margin for error.
Think Tax.
Think Tolley.
TolleyGuidance gives you direct access to critical, comprehensive and up-to-date tax information and expertise you can rely on.
Take a free trial
Popular documents
LEXISNEXIS

Capital vs revenue expenditure

Expenditure of a capital nature is not allowed as a deduction when calculating trading profits. Expenditure of a revenue nature is allowable, provided there is no specific statutory rule prohibiting a deduction and the expenditure also satisfies the wholly and exclusively test. See the Wholly and

LEXISNEXIS

Requirement for trust accounts

Duty to prepare trust accountsUnder the laws of England and Wales, trustees have a duty to account to the beneficiaries for their financial administration of the trust fund. This duty is established by a substantial body of case law. In the case of Armitage v Nurse, Millett LJ stated:“Every

LEXISNEXIS

Share for share exchange

This guidance note considers the capital gains tax implications where shares are sold in exchange for new shares.The consideration paid by a purchasing company to the shareholder(s) for their shares in a target company could be in the form of either:•new shares in the vendor in exchange for shares

LEXISNEXIS

Class 1 v Class 1A

Class 1 and Class 1AClass 1 and Class 1A are the categories of NIC that can be charged on expenses reimbursed and benefits provided to employees. These classes are mutually exclusive. A benefit cannot be subject to both Class 1 and Class 1A NIC. Three requirements must be met before Class 1A NIC is