The financial pressures on UK businesses is greater than ever, thanks in part to the imminent National Insurance changes announced in last year’s Autumn budget. As such, reductions in headcount and restructurings remain high on the agenda for many businesses seeking to remain profitable and viable. This is unlikely to change any time soon.

At present, where an employer proposes to make 20 or more employees redundant within a 90-day period “at a single establishment”, they will be under a legal obligation to collectively consult with appropriate employee or Trade Union representatives. An “establishment” is generally the unit or workplace to which employees are assigned. It must be relatively permanent and stable but doesn’t need to have independent management who can decide to dismiss staff, or be economically or administratively separate.

There has been a raft of case law interpreting the meaning of “establishment”, which only serves to highlight the complexity inherent in determining what an “establishment” is in the context of a particular business. The waters become further muddied where remote working is present. For instance, the relevant team or department may form the “establishment”, with the geographical location carrying less weight.

Other key points to note include:

• What constitutes redundancy: A redundancy for the purposes of collective consultation includes a dismissal for any reason not related to the individual employee. It therefore has a broader application than it may initially appear, encompassing “fire and rehire” dismissals.
• 90 days: The 90-day period is a rolling period and could include redundancies which have already been made. Employers must therefore look forward and backwards when assessing whether the collective consultation duty is triggered. 
• Consultation requirements: Where the duty to collectively consult applies, the consultation process is prescriptive and can be easy to get wrong if not approached correctly. Consultation begins once certain specified information is given to the representatives and must continue for a minimum period before any dismissals take effect. The minimum period depends on the number of proposed redundancies: 45 days where 100 or more redundancies are proposed and 30 days where 20 or more redundancies are proposed.
• “Meaningful” consultation: The law requires “meaningful” consultation – it shouldn’t be a box-ticking exercise. Views should be sought and genuinely considered in an effort to reach agreement. For example, the proposed selection process and scoring system should be discussed and the representatives’ views taken into account.
• Notification: Employers must notify the Department for Business, Energy and Industrial Strategy (BEIS), using form HR1, either 30 days before the first dismissal takes effect (in the case of 20 or more redundancies) or 45 days before the first dismissal takes effect (in the case of 100 or more redundancies). This is a key step with severe penalties for non-compliance.