Redundancy – Don’t Forget Consultation and Age Discrimination

United Kingdom

Today, it’s vital to take account of the laws on informing and consulting on collective redundancies, and the need to remove or justify any age discriminatory features of redundancy selection or enhanced redundancy pay. The cost of getting it wrong can be enormous.

If you are proposing to make 20 or more redundancies at one establishment within a 90 day period, you must go through a 30 day period of information and consultation with trade union or employee representatives before giving out any redundancy notices. The period increases to 90 days if the proposal is for 100 or more redundancies. In either case, a penalty of up to 90 days pay will be awarded by an Employment Tribunal.

The Unite trade union is trumpeting a recent success for its members. Bristol Employment Tribunal made a 90 day award of £120,000 in favour of 22 union members made instantly redundant by Centrobell Ltd.

Age discrimination can impact on redundancies in two ways – selection criteria when length of service is used, and where there are enhanced redundancy payments which vary according to age or length of service.

Any age discriminatory features will be unlawful unless they can be justified as proportionate means of achieving a legitimate objective.

The Employment Appeal Tribunal, in hearing the first cases on age banding in enhanced redundancy schemes, has given notice that the employer’s justification must be carefully scrutinised by Tribunals and that continuing discriminatory schemes to avoid disruption to industrial relations or even after consulting representatives or employees will not wash as potential justification.

Awards of compensation for age discrimination are uncapped and older workers selected first or given less redundancy pay because a pension was available to them, could have potentially very large losses to claim.