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19 April 2013

New guidance on collective redundancy

Our employment team reports on the new guidance on managing collective redundancies, published by ACAS.

With effect from 6 April 2013, the rules relating to collective redundancy consultation (affecting 100 or more employees) were amended, reducing the minimum period before the first redundancy can take effect from 90 to 45 days.

ACAS has now published new guidance aimed at employers to explain the revised legal framework and best practice requirements for an effective collective redundancy consultation.

A collective redundancy is one where an employer is proposing to dismiss 20 or more employees at one establishment within a period of 90 days or less.  In this situation, strict legal requirements apply in relation to the collective consultation of affected employees, with stringent penalties for those employers who do not comply.

The guidance includes an explanation of the meaning of ‘establishment’, which has generated a large volume of case law and can be difficult to determine in practice.  It also clarifies which employees should be counted in determining how many employees are affected and whether the collective consultation obligations apply.

In addition, the guidance sets out the rules relating to the election of employee representatives (where none are already in place) and includes a sample redundancy agreement between employers and employee representatives, together with an example redundancy selection criteria matrix.

The guidance will be essential reading for all employers who may be embarking on a collective redundancy exercise, and also includes some useful information that applies to redundancies of all sizes.

A copy of the guidance is available on the ACAS website.