Guidance on Collective Consultation (COVID19) - Vista
Collective consultation

Guidance on Collective Consultation (COVID19)

In this extraordinarily challenging period, most employers are having to consider what changes they need to make to protect the business and to keep going (e.g. pay cuts; reduction in working hours; imposing lay-offs).

Whilst such changes may need to be made as a matter of urgency to save the business, the law nonetheless requires an employer to enter into consultation with representatives of the workforce in order to make these changes lawfully and avoid financial penalties by way of having to pay compensation to employees for failure to comply with the law on collective consultation.

For more guidance around the emerging COVID19 pandemic, please visit our Coronavirus Advice Hub. 

In what circumstances does the law require employers to consult?  

The duty to consult arises where an employer is proposing some form of organisational change which could result in the termination of existing employment contracts. That could be in a redundancy situation (i.e. because of headcount reduction or changes in job roles); or where the employer is seeking the agreement of the workforce to change terms and conditions and would have to terminate existing contracts and impose new contracts in the absence of any agreement to the change (e.g. when making the very kind of changes that are referred to in the introduction above to try and beat the coronavirus).  

If the redundancies or changes proposed affect 20 or more employees in one establishment (usually a single work location), the duty to collectively consult applies. 

Who do I have to consult with? 

You have to consult with the trade union(s) that you recognise at the work location. That means that the union will put forward the individuals that have been elected or appointed to represent the group of employees in particular sections of the business (e.g. the shop floor; office staff; warehousing staff). Those sections of the workforce are known as the bargaining unit. 

The representatives may have been elected by the workforce or the union may have external officials employed by the union as the representative for some bargaining units. Before the consultation begins you will need to be clear who the representative is for each bargaining unit. You can clarify this with the union if you are not sure. 

If there is no recognised trade union at the work location in question, then you have to consult with employee representatives. That means that if you have an existing employee forum or some type of works council, who have been appointed or elected, and could be regarded as having the authority to receive information and consult on behalf of employees, then the consultation would be with those representatives. It does not matter if the constitution for any such forum or works council does not explicitly state that it is for consultation purposes in situations such as you are facing. What matters is that you can show that the representatives have been appointed or elected and can reasonably be regarded as the right people to talk to given the current situation. We can help you in setting out the position when sending out the notices which are required to commence the collective consultation exercise. 

If there is no employee forum or works council then you have to make arrangements for the affected employees to elect representatives to consult with. The arrangements for such an election have to take place as you can reasonably do so. It is your responsibility to propose the number of representatives according to the way in which you organise your business and the number of employees in each bargaining unit. The arrangements are something that we can help you with to ensure compliance with the rules. In particular, it will be important for the newly elected representatives, who will now have a central role in you implementing a strategy to save your business, have some understanding of their role and rules for the consultation. We can provide direct support and guidance to ensure that the representatives are grounded in consultation rules and procedure.   

How long do I have to consult for? 

If the changes that you are making could result in 20 employees having their current contracts terminated, then the consultation period is 30 days.  

If the changes that you are making could result in more than 100 employees having their current contracts terminated, then the consultation period is 45 days. 

That means that during that period nobody should have their contracts terminated (i.e. the fist dismissal cannot take effect until after the 30 or 45 days expire). 

However, the period of consultation can be reduced by agreement. In the current extraordinary circumstances, given the urgency with which measures may need to be introduced that should a one of the first items on the agenda in the first consultation meeting.  Where such agreement is reached it should be properly recorded (e.g. either by writing to the reps to confirm agreement and/or by recoding it in meeting minutes which should be circulated to the reps). 

What does consultation mean? 

Consultation with the reps should provide a meaningful opportunity for the proposals to be considered. That means that the proposals should be put before the reps as soon as possible after they have been formulated. The reps should then be given the chance to comment on them and their should be discussion about alternative ways of achieving the business’ aims. However, ultimately, whilst the aim of consultation should be to reach agreement, there is no requirement for agreement. Therefore, once the proposals have been discussed and alternatives canvassed, then you can make the decision to implement the proposals should you wish. 

Do I have to provide information to the representatives? 

The rules do require you to provide the reps with the information, in writing, as soon as you reasonably can. That information is all about how many people could be dismissed as a result of your proposals (i.e. if you are proposing changes to terms and conditions then you have to work on the basis that nobody will agree to the changes because that is the number that could potentially have their contracts terminated); where they are and what they do in the business; how you would go about terminating their contracts if it comes to that; and what they would be paid in the event of termination. 

Once the information is given then reps should be provided the opportunity to speak to their constituency. 

What if I don’t consult? 

There is a financial penalty. You have to work on the basis that the penalty will be 90 days pay for each employee affected. In short, you can incur a large fine at a time when you can least afford it. 

If we can help you to avoid this then please contact us as a matter of urgency. We partner with HR teams in planning, advising and executing collective and individual consultations.

For more guidance around the emerging COVID19 pandemic, please visit our Coronavirus Advice Hub. 


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