Getting the process right can help both employees and the business
Proposed closures of several steel manufacturing sites in the UK have hit the headlines recently, including at SIS’s plant in Redcar with the loss of around 2,200 jobs. Caparo Industries has announced that administrators have been appointed to parts of its operation, putting 1,700 jobs at risk, and Tata Steel has confirmed that 1,200 jobs will be lost at two of its sites.
At such a devastating time for employees, employers need to ensure they are managing the consultation process to minimise the risks to their business as well as ensuring that employees are treated fairly. The tips below address not just the legal issues but some of the more practical points.
Plan, plan and plan some more
Planning the process is key. There can often be questions or issues that take a consultation in a slightly different direction. By anticipating some of these at the outset, employers can keep the consultation on track.
Prepare a timeline of tasks and milestones
Decide what has to be done, who will do it and when. For example, do employee representatives have to be elected or are they already in place? In heavily unionised environments such as the steel industry, union reps will already be active. In others, an election may need to be carried out before consultation can commence. Employers should prepare template announcements, letters, draft redundancy calculations, scripts for managers conducting consultation meetings, and so on. This way the process can run smoothly and documents will be consistent across the business.
Get the numbers right
Collective consultation is triggered under the Trade Union and Labour Relations (Consolidation) Act 1992 where there is a proposal to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less. If 20 redundancies are proposed, the consultation period is a minimum of 30 days, and this period increases to 45 days where 100 or more employees may lose their jobs. Note this is a minimum period so employers should always build in more time for consultation.
Don’t delay starting the consultation
The vexed question of when a collective redundancy proposal comes into existence is still the subject of legal debate. Recent case law indicates that a provisional decision is enough to trigger the duty to consult, so it is important to flag to decision-makers that the duty is triggered at the point a plan is formulated which may result in redundancies. Any delay to starting consultation risks a protective award against the employer of up to 90 days’ gross pay per employee affected.
Remember the paperwork
The section 188 notice and HR1 form required under the regulations are essential documents that need to be prepared and delivered to reps in order to trigger the start of collective consultation. The HR1 form must also be submitted to the Department for Business, Innovation and Skills (note it is a criminal offence not to submit the HR1 Form as is evidenced in a recent case).
Engage with the unions early
Unions are always going to want to do the best for their members. Balloting for strike action to prolong a process and maximise employees’ pay is not uncommon. It is, therefore, critical to engage with unions early through open and honest dialogue. Employers can never eliminate the risk of strike action completely during a process but communicating early with the unions will certainly reduce the risk.
What can be offered to soften the blow?
In areas where steel plants are closing, potentially putting high numbers of people out of work, there is going to be a huge impact on families and local communities. Employers are obliged to consult about ways in which the consequences of redundancies can be mitigated. Options include, but are not limited to, offering retraining, asking other local employers if they have any vacancies and seeing if they will come in to speak to employees about roles they could offer, providing outplacement support through CV drafting and interview technique workshops, giving more than standard references, offering enhanced redundancy pay (if possible), and so on.
Don’t forget individual consultation
Employers should factor in time to carry out individual consultations. Some employers prefer to speak to individuals early on in the process but to do so they need the reps’ consent where the collective element of the process has not yet concluded. Engaging with the reps early may, therefore, assist in getting their agreement to speak to individual employees sooner.
Helen Burgess is an employment partner at Shoosmiths
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