To Consult Or Not Consult? Is That The Question?

For a dismissal of an employee to be fair, the employer must have both a potentially fair reason for dismissal and to have acted reasonably in the process. Redundancy is a fair reason for dismissal and appropriate consultation is fundamental to the fairness of any redundancy. Inadequate or non-existent consultation can result in successful legal claims including for unfair dismissal.

For an employer to consult appropriately, they must have an open mind and still be capable of being influenced about alternatives to redundancy. Any consultation will only be meaningful if it happens at a sufficiently early stage rather than when there is in fact no possible alternative.

The key components of fair consultation are:-

Consultation when proposals are still at a formative stage
Adequate information to which the employee can respond
Adequate time in which an employee can respond
Appropriate consideration of any employee response

To show that the employer acted reasonably throughout consultation the key elements are:-

To warn and consult an employee about a possible redundancy
A fair basis of selection including a correct selection pool
and using fair and objective selection criteria
Consider any available suitable alternative employment

The matters to be discussed during consultation will always depend on the circumstances in question, but a fair consultation process is likely to enable the employee to comment on the basis of selection; to challenge the selection process and to raise any additional factors the employer may not be aware of; to put forward any alternatives to avoid redundancy and consideration of any suitable alternative employment.

There are no prescribed timescales within which consultation must take place if, as in the clear majority of cases, the number of potential redundancies is less than 20. However, the shorter the consultation period, the more likely it is to be challenged as inadequate and unfair. If the employee is not consulted until very late in the redundancy process, any tribunal is going to be particularly concerned about the adequacy of such consultation. In one tribunal claim seven days consultation was found to be the “bare minimum” but it is always essential to provide evidence of adequate consultation as appropriate in particular circumstances.

Whilst all employees have a statutory right to be accompanied to any “disciplinary hearing”, that does not actually include redundancy consultation meetings. Nevertheless, it is strongly advisable for employers to allow employees to be accompanied by a colleague ( or a trade union rep) at all such meetings as any refusal may be difficult to justify and can therefore contribute to a dismissal being found to be unfair.

Where there is a proposal to dismiss as redundant 20 or more employees at one establishment and within a 90 day period, the employer is legally obliged to engage in collective consultation with either trade union or elected employee representatives. The statutory consultation requirements are set out in detail whereas in individual consultation, the essential issue is of fairness, based on guidelines established by case law. Collective consultation does not eliminate the need to consult with individual employees but it may make the employer’s obligations in this regard less onerous. It is essential that for any consultation to be and seen to be fair, the substance and the process adopted must be both fair and reasonable.

For further information, please contact:
Mark Dent, Partner and Head of Employment Law
Direct Line: 020 7299 9263
Email: mdent@pcblawyers.com