Redundancy Consultation Period: How It Works

A redundancy consultation period is an allocated period of time where teams have conversations surrounding potential redundancies in the organization. This includes who is likely to be affected, why it is happening, and fielding any employee questions.

Here are the rules about the redundancy consultation period, according to the UK government:

• If you are making fewer than 20 redundancies, then you have no legal obligations to adhere to any specific rules about how long consultations should last, or how many there should be.

• Rules kick in for a consultancy process when 20-99 employees are being made redundant at the same time. Talks must start at least 30 days before the first position ceases to exist.

• When dealing with more than 100 cases at one time, the redundancy consultation period must start at least 45 days before any dismissals take effect.

Read our complete guide to voluntary redundancies in the UK right here, right now.

It’s essential to make it clear that redundancies are about removing positions, not individuals, to stay afloat as a viable entity. When it comes to communicating during a redundancy consultation period, being clear and supportive is essential.

Acas recommends that you address the following points when you share the final redundancy decisions with employees (i.e. who stays, who leaves, and why) as part of the redundancy consultation period.

These include:

• Why the company needs to make redundancies

• How many people are being made redundant

• Which parts of the business (departments/sections) are being affected

• Why the individual has been selected for redundancy

• What other jobs (if any) are available

• How the process will take place

• How, when, and where to ask questions about what happens next

• And, how any redundancy payments will be calculated

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Obviously, those who stand to lose their livelihood are the worst affected by redundancies.

However, that is not to say it’s just an administrative, box-ticking exercise for everyone else. Take off the suits, unpin the name tags, and loosen the ties, and you’ll find the employers, human resources staff, surviving workers, and union members are… well, people. They also go home to their families with a tortured mind in the face of downsizing.

So, in essence, who is affected? Everyone.

And, depending on how many employees are being made redundant at the same time, various rules apply about how long consultation periods should be.

HR leaders have a huge role to play during the redundancy consultation period in creating a crisp, clear picture of why downsizing is necessary.

Restless shareholders may be piling immense pressure to act immediately, but the law says people need time, and you have the opportunity to help them understand:

• Why redundancy is necessary.

• Why it’s not personal.

• How you will be helping them during the process.

Highlighting, with clarity, why the business needs to downsize its operations can offer all the parties the opportunity to reconcile their emotions. This is even more important during COVID-19.

If you don’t already have a policy on dealing with redundancy, it’s important to start writing down the processes. A good place to start is the acas step-by-step guide on managing staff redundancies. Note – they have a separate guide for ‘collective consultation’ (that’s when 20 or more employees are made redundant at the same time).

If you’re creating your own policy, the more information you can give an employee, the better.

Redundancy is a confusing and frustrating time for everyone involved. This is true even for those who stay with the business.

That’s why it’s so important to have (and use) the mandatory consultation period as well as possible. Some top tips include:

• Telling employees you’re open to talking about redundancy is not just the right thing to do, it’s mandatory. As acas explains, "If you do not hold genuine and meaningful consultation before making redundancies, employees could claim to an employment tribunal for unfair dismissal.”

• Good HR leaders also know that helping people affected to share their innermost feelings is really important. That’s why many companies provide a period of external support to provide an anonymous listening ear for employees before and after they leave.

• You’ll need to prepare departmental heads and managers, to receive the outpour of employees’ emotions, too, and to do it with an open mind. At times, the employees’ outbursts may come across as personal attacks. Try to help managers be ready to deal with this, and provide an outlet for them to vent their own frustrations if it will help.

• While it might be tempting temptation to avoid one-to-one sessions will be there during the pandemic lockdown periods, it is really important to share sensitive information privately with individuals. Some employees might find it helpful to have their spouse or children around them when sharing their pain and sorrow.

Start by setting an informative, empathetic but practical tone. Like any dialogue, the employers, human resources leaders, employees, trade unionists, and employees’ representatives will play a pivotal part in setting the tone and tempo of the redundancy consultation period.

This is a time of heightened emotions and it’s not easy to manage people’s responses when they’re stressed, but how you deal with employees (both those leaving, and those staying) during this tough time will set a benchmark for all future interactions with employees who ‘survived’ the redundancy.

Treating people who are leaving fairly and compassionately, and reaching out to those who are affected, even if they’re staying, can be the most powerful way to protect and preserve the business brand in the face of adversity. Ideally, if you treat people right, employees might even be able to walk away from you during the redundancy consultation period with renewed faith in humanity.

It is critical to show that the company cares at this chaotic time. Every employee will feel like their future is at risk, even if their job is safe.

That is where the redundancy consultation period, again, becomes your dashboard of warning dials. Managers and employees who will stay on might need counselling, too.

Research by Yehuda Baruch and Patricia Hind revealed that “employees who remain within an organization after significant downsizing or delayering will experience adverse effects as profoundly as those who have left.”

This is where your corporate culture is imperative. Not only having an accurate read of where it stands, but strategic initiatives your team can take to try and keep spirits high. Or, failing that, ensure that people feel supported.

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The entire point of a redundancy consultation period is to help people feel supported and to clearly outline why redundancies are occurring and the logic behind them. Sadly, sometimes managers and employees might decide to leave anyway.

Basically, how you choose to communicate can help prevent an impending exodus of key personnel. No matter how much effort you put in, if employees think the company handled the redundancy consultation period badly they might identify you with mistrust, instability, and uncaring. So, communicate with care!

When handled well, this phase provides an ideal opportunity for everyone involved to talk, listen, and exchange notes on how to minimize, and manage, the trauma at different levels.

It may come across as a mere formality but it is, in fact, critical to how everyone will weather the ensuing psychological blizzard.

Ultimately, if employees feel like they’ve been listened to, dealt with empathetically and supported through this phase your company is more likely to maintain its employee goodwill.

When done right, your company will not only show empathy to those on the way out, but also instill confidence in those who stay that you do right by your staff, no matter how hard things get. And, hopefully, they’ll remember that, and stick around themselves.

For more information about redundancy pay and severance pay in the UK, consult the relevant articles on the Personio HR Lexicon.