Cheshire East Good practice guide

Good practice guide on informing and consulting during a redundancy process
Overview

 Informing and consulting with the workforce is essential for the success of any organisation, and is particularly important in a redundancy situation. This guidance discusses how employers and employees can exchange views and ideas, issue and receive instructions, discuss problems and consider developments in a collective redundancy situation. This process helps employers make better decisions during the redundancy process, both for the Council and its employees.

What is meant by informing and consulting collectively?
Where an employer intends to make 20 or more employees at an establishment redundant within a period of 90 days or less, it has a statutory duty to inform and consult with representatives of a recognised trade union or, where no union is recognised, employee representatives, prior to any redundancies being implemented.
Informing is about the interchange of information and ideas. Consultation is the process by which management and trade union and employee representatives examine and discuss issues that are of mutual concern. In a redundancy situation, the aim of consultation is to ensure that there is a genuine exchange of views and information in respect of why redundancies are proposed and how they can be avoided, so that employees have an opportunity to influence the decision-making process.

Appearing to consult where the employer has already made decisions about redundancy is unproductive and creates a feeling of mistrust among employees. While the decision as to whether or not to make redundancies is a management one, employers will benefit from seeking and considering employees’ views before reaching a decision.

The importance of following good practice when informing and consulting
While informing and consulting in a redundancy situation is a legal requirement, the provision of information and effective consultation can lead to fewer interruptions to services and costs savings during the redundancy process, for a number of reasons:
•    There is more control over the communication of the business rationale for redundancies. This can help to avoid the spreading of incorrect information through rumours and prevent mistrust.
•    Where employees are able to express their views and make proposals, they may bring to the managers attention issues about which they were previously unaware, for example day-to-day working practices. This can help in finding ways of eliminating or reducing the need for redundancies. Additionally, knowledge gained during the process can be helpful to the future efficiencies.
•    Employees who are informed of the business rationale understand why redundancies are taking place and, if they are consulted, can take ownership of the situation. Therefore, they are more likely to cooperate with the process and the decisions made. This can result in fewer grievances, appeals and employment tribunal claims regarding the decisions made, saving the Council significant management time and costs.
•    Employees who are not dismissed on the ground of redundancy will be more accepting of change if they understand the rationale behind the decisions and feel that the employees who were dismissed were treated with respect.
•    Employees who feel that their views and opinions have been actively sought and considered are more likely to be committed to, and engaged with, the organisation. This applies to employees who are dismissed on the ground of redundancy and to those who remain following redundancies, resulting in fewer grievances, appeals and employment tribunal claims. Maintaining employee morale also helps to preserve the Council’s reputation, as dismissed employees will be less likely to talk negatively about the organisation.
•    Effective information and consultation with employees during a redundancy process could result in better, more streamlined processes, and improved communications between management and teams.
•    Employees who are well informed during the redundancy process are more likely to be productive at work, because they spend less time worrying about what might happen.

Responsibility for information and consultation
Senior management: It is essential that a senior manager leads the information and consultation process, and it is common for HR to assist in this process.
The manager should be visible as the leader of the process, for example by appearances on the corporate intranet and in other internal communications channels such as the company magazine, blogs or webcasts.
In addition to meetings, effective use of other communication channels such as the corporate intranet, team talk and newsletters enables the manager to explain the main elements of the procedure, including the business rationale behind the process, what is going to happen, how the process will be implemented and when decisions can be expected.
If senior managers explain the main elements of the procedure, it is more likely that middle managers and team leaders will buy into the decision-making process and be able to discuss and explain the business rationale to employees.

Affected employees are likely to feel less aggrieved if the message comes from a member of senior management, potentially resulting in fewer conflicts and litigation. A reasoned explanation by senior management helps to demonstrate that the redundancy process is well thought through, rational and equitable.
Line managers and team leaders: Line managers and team leaders are usually the most trusted source of information in an organisation, because they are the first source of information for employees.

Line managers will also be directly affected by any changes, through losing team members or possibly their own job. As such, their morale and opinions will carry great weight with team members.

Therefore, it is important that line managers are kept well informed by a clear top-down approach explaining the reasons for, and the fairness of, the redundancy process. The flow of information needs to be well managed, so that the messages are consistent and clear. Crossed wires and conflicting information discredit the process.

If senior managers communicate directly with staff, team leaders and line managers should be kept informed and advised of the communication. This can be done through cascading from one level of management to the next, typically conducted at management meetings or by email communication.

Management should consider employees’ likely initial negative reactions and whether or not they are able to deal with these and any questions that might arise. If necessary, line managers should be briefed in detail and it is useful to produce a set of Frequently Asked Questions along with appropriate responses.
Line managers and team leaders should be clear that information and consultation is not a one-off obligation but a method of communication to keep employees up to date on an ongoing basis during the redundancy process. Line managers should be prepared to answer any questions that employees raise during the consultation process.

HR: HR has a substantial role to play in the information and consultation process. HR is well placed to identify employee needs, and advise management on associated policy and procedures.

Trade unions: A key part of a union official’s role is to ensure that his or her members’ views and opinions are conveyed to management.
Management and union communications to staff about what was said or agreed during joint discussions should convey the same message wherever possible, to minimise misunderstandings and distrust. This may be achieved by a jointly agreed communication, separately distributed through the communication channels used by management and the union.

The format of the information and consultation process
Management can inform and consult using a variety of communication and information methods, depending in part on the size and structure of the organisation. Whatever method is used, employers should take into account the following factors:
•    The information given should be clear, easy to understand and concise.
•    The information should be presented objectively so that employees are encouraged to make proposals without being influenced by the employer’s views.
•    The information should be regular and systematic: management should aim to deliver updates on a weekly basis, for example, so that employees know when to expect them. Updates are crucial to the process as uncertainty presents a danger to employees’ morale and productivity because it distracts them from their work. However, daily updates can be counterproductive in that the drip-drip effect can lead to worry and speculation among employees as to whether or not they have the whole picture. The effect on employees' morale and productivity can be long lasting: even after the redundancy programme has ended, employees who remain with the organisation can experience “survivor syndrome”.
•    The information should be relevant and open to consultation.
•    Employers should be consistent when providing the information. Particular care should be taken when different sources give the information.
•    Employers should be transparent when giving information.
Every redundancy situation is unique, and there is no specific method for informing and consulting that will suit all cases. Employers should consult both and indirectly because the two methods add to the efficacy of the consultation process, although in different ways.

Direct information and consultation
Direct information and consultation is the process by which employers communicate directly with staff, rather than through trade union or employee representatives. It allows employees to appreciate that the employer is taking the issue seriously and to participate in a way that is relevant to their particular situation. Direct information and consultation can take a variety of forms:
Face-to-face communication: Face-to-face communication with employees can take place through informal discussions with individual members of staff or more formal group meetings or seminars.

Communication through council-wide meetings shows that:
•    senior management has ownership of the process, communicating its importance and rationality to staff; and
•    senior managers are aware of the impact on staff and are sympathetic to their situation.
However, even in the early stages of consultation, departmental meetings are essential, as employees will be better able to ask questions than at council-wide meetings. Managers can ensure that responses to questions that cannot be answered immediately are given at the next departmental meeting or shared through other internal channels of communication.

Management should also share information with employees on a one-to-one basis as part of the individual consultation process.
While face-to-face communication is useful for providing information at the early stages of a collective redundancy process, this method does not easily allow for employees to feed back and comment and should therefore not be used as the main or only method of information and consultation.
Written communication: Written communication is most effective where:
•    the information is important;
•    a back-up for oral communication is needed; and
•    a permanent record is needed.

Written communication can occur in a number of ways:
•    Email alerts/intranets: Email alerts can be used to provide information on a specific part of the process, for example that formal consultation will begin on a specific date. They should be short and to the point. They are useful as they can be distributed to give all employees the same information at the same time. The electronic process is efficient, but it can have drawbacks, in particular contributing to the grapevine effect if employees forward emails to those with little or no understanding of the background. Electronic information should be reinforced by face-to-face communication, so that people can ask questions and receive answers.
•    Individual letters to all employees: Individual letters to employees can be used to give information about matters of major importance during consultation, for example inviting employees to individual consultation meetings.
Recorded calls: These enable employees to listen to a member of senior management provide information via a specially set-up audio call.
Special cases: Information must be accessible to all employees. Particular care is needed where:
•    There is a multi-racial workforce, where English is not the first language of employees, or where employees have difficulty reading English;
•    employees work: night shifts; at different, particularly remote, locations; from home; or on a flexible basis; or
•    employees are absent from work due to sickness, maternity/paternity, family-related leave or extended unpaid leave.

Indirect information and consultation
Employers are obliged to consult with the recognised union of the employees who may be affected by the proposed redundancies, or by any of the measures taken in connection with those dismissals. Consultation meetings the with union are an important part of the redundancy process, because they are more interactive than direct consultation. If representatives have been trained in the skills required for consultation, they will be able to take part in meaningful discussions with management.
Consultation forum: Indirect consultation could take place via  the Corporate Trade Union Meetings.

Timing of information and consultation
Where between 20 and 99 redundancies are proposed over a period of 90 days or less, employers are required to consult in good time and at least 30 days before any dismissals occur. Where more than 99 redundancies are proposed over a period of 90 days or less, employers are required to consult in good time and at least 90 days before any dismissals occur.
Consultation is about ways of avoiding the dismissals, so the information needs to be given early enough to allow a meaningful discussion about whether or not redundancies are even necessary. Therefore, management should inform and consult as soon as reasonably practicable, which means beginning the process when proposals are at a formative stage, to ensure that employees have time to respond to the proposals in a way that can affect the outcome. Because consultation is a such complex process, management may benefit by factoring more time into the process.
However, consultation should take place only once management is able to communicate its proposals effectively. Consulting too soon, when management does not know the answers to the likely questions, can result in frightened and disengaged employees, with obvious consequences for morale and productivity.
The consultation process should continue until issues have been aired and proposals and counter-proposals have been made. Employee representatives and trade union officials should be able to influence the outcome right up to the end of the consultation period.

The purpose of consultation
Consultation is not simply the act of passing information on or presenting employees with decisions that have already been made. Collective consultation is a process by which management and trade union or employee representatives are able to discuss and examine issues of mutual concern, with the effect that employees have the opportunity to influence the decision-making process by considering, discussing and feeding back on suggestions made by management.
Informing is about the interchange of information and ideas. Consultation goes beyond this, and involves managers actively seeking and taking account of employees’ views before making a decision. Managers should listen to the representatives, engage with them and consider their views when making decisions.
Managers should also bear in mind the following, to help make the process meaningful:
•    Rather than viewing the consultation process as a necessary evil, managers should enter consultation with an open mind: they should be open to employees’ suggestions and to working with them.
•    Managers should not rush through the process or dismiss suggestions and proposals without having given them due consideration and feeding back as to why the organisation cannot act on them.
•    Practical and workable solutions can ensue following consultation. Decisions during the consultation process are made in the full glare of scrutiny from employees and trade unions, so they need to be well considered, rational and clear. This requires management to think through carefully whether or not redundancies should be made, and, if they should, where.
The purpose of the consultation procedure should be communicated to trade union and employee representatives at the start of the consultation process. The employer should make clear:
•    that it will explain the business rationale behind the proposed dismissals;
•    that, while it will make the final decisions, representatives will have a full opportunity to comment on and discuss the proposals with the employer; and
•    that it will listen to them, engage with them and consider their views when making decisions, so that they have a real opportunity to influence the outcome.
Consultation does not mean that all employee suggestions as to how redundancies can be avoided need to be acted on. There may be circumstances in which suggestions are impractical or too costly to consider further.
However, management should not disregard employee suggestions without first setting out the business rationale for doing so. Where management are not able to enact a suggestion, there should be a good reason for not doing so and advise all of those involved of this reason.
Information and consultation topics
The information that must be disclosed in writing to trade union or employee representatives during the collective information and consultation process is:
•    the reasons for the proposals;
•    the number and description of employees that the employer proposes to dismiss as redundant;
•    the total number of employees of any such description that the employer employs at the establishment in question;
•    the proposed method of selecting the employees who may be dismissed;
•    the proposed method of carrying out the dismissals, taking account of any agreed procedure, including the period of time over which the dismissals are to take effect; and
•    the proposed method of calculating any redundancy payments, other than those required by statute, that the employer proposes to make.
Employers are under an obligation to consult collectively with a view to reaching agreement about:
•    ways of avoiding the dismissals;
•    reducing the number of employees to be dismissed; and
•    mitigating the consequences of the dismissals.

The following topics can be discussed to try to reach agreement on ways of avoiding or reducing the number of redundancies. Giving serious consideration to these areas can benefit employers and employees, because they may allow skilled and experienced employees to be retained, avoiding the need to re-hire if circumstances improve:
•    Alternative working patterns: Many employees are receptive to accepting different working patterns or contractual terms, particularly on a short-term basis, if it means that job cuts can be avoided.
•    Job-sharing: This constitutes a role being split into two, allowing two employees to do one role and both continue in employment.
•    Redeployment/Retraining: Where it is not possible to avoid roles becoming redundant, employers may be able to redeploy employees into alternative positions by providing them with suitable training. While this may not be possible for roles that are highly technical or require a certain level of experience, it may be possible for roles where new skills can be learnt over a relatively short period of time.
•    Pay freeze or cuts: This is a popular option with employers, as significant savings can be made over the short term.
•    Recruitment freeze: This should be one of the first tactics that an organisation uses to avoid redundancies. Consultation should help employers to identify roles that do not need to be filled immediately. Work could be absorbed by existing members of staff, at least in the short term, resulting in cost savings. Where it is essential that certain roles are filled, management should provide the workforce with a clear explanation as to why this is the case.
•    Ceasing to hire agency staff.
•    Ceasing or reducing overtime: Where employers put a halt on overtime, in respect of the whole or a particular part of the organisation, this could help to save significant costs.
•    Improving business practices and procedures: Employers could consider with representatives whether or not the business could work more efficiently, thereby saving costs, by improving its processes. Employee knowledge about day-to-day working practices could help to find smarter ways of working.
•    Voluntary redundancy or early retirement: Employers could consult on whether or not they will accept volunteers for redundancy or offer early retirement, and, if they will, on what terms.

Individual consultation
Individual consultation is a key part of any redundancy consultation process, because failure to consult individually, even where the employer has consulted collectively, is likely to result in any dismissal on the ground of redundancy being unfair.
Individual consultation involves the manager having individual meetings with employees at risk of redundancy, usually after the collective consultation process has concluded. Employees are more likely to react in a constructive way during individual consultation if this follows collective consultation, because they will be empowered to present proposals and alternatives to redundancy.
Where the employer has consulted collectively, it should hold at least two individual consultation meetings with individuals at risk of redundancy.
At the first meeting, the business rationale behind the redundancy process should be explained. Even though in a collective exercise, consultation will have already taken place, employees might have little to say at the first meeting, because they are upset. Often, employees may have not have thought that the process will have any effect on them.
The second meeting should usually take place about a week later. The timing is important, as employees will need time to digest what has been discussed at the first consultation meeting and consider any questions or proposals that they wish to bring to the consultation process. The employee should be provided with the opportunity to comment on the  proposals and the employee’s suggestions as to how redundancy can be avoided should be discussed. Notice can be served at the second consultation meeting, but should not be given until the individual has had the opportunity to feed back on the proposals. Typically, the employee is given the opportunity to feed back and, if nothing new is brought to the table, notice is served.

Individual consultation is more focused on the employee in question, for example involving discussions on any alternative roles for which the employee could be considered, time off work to look for new roles and the kind of retraining that the individual may need, depending on his or her skills and experience, both generally and in searching for and applying for work.

These meetings, alongside the collective consultation process, will provide employees with the opportunity to present their case and make representations that relate to their individual situation. The employer should invite any employee at risk of redundancy to a meeting in writing and give him or her adequate notice of the meeting, so as to allow the individual sufficient time to prepare.
Managers may wish to consider allowing employees to be accompanied by a workplace colleague or a trade union representative, as this will help employees to feel supported and more able to participate in the consultation process.