A recent ACAS publication shows that around 20% of SMEs are facing the prospect of making redundancies in 2023 due to the significant economic pressures plaguing the UK. Whether your SME is one of the 20% or not, understanding how to run a redundancy consultation is a vital component of the process, and we’ve shared everything you need to know about the legal requirements so that you can get it right from the start.

What Does a Redundancy Consultation Entail?

A redundancy consultation period is a set amount of time during which an employer and employees engage in meetings and discussions before officially deciding to proceed. During this time, the employer and the employees engage in conversation to discuss the following who will be affected, which roles could be removed, the process for deciding on the redundancies and how the decision will be made over who will be made redundant.

What You Need to Know About Consultation Time Frames

When the decision has been made to move forward with redundancies, you will need to be aware of the time frames you must adhere to. Any group of 20 or more redundancies will be made within 90 days and requires you, by law, to provide collective consultations. If your redundancies total less than 20, there is no legal obligation to hold consultations, but it is seen as good practice.

When it comes to the length of time your consultation needs to go on, it varies depending on the number of staff you are looking to make redundant:

Number of Staff Being Made RedundantRequired Consultation Period
Under 20No specific timeframe other than ‘meaningful’
20 – 9930 Days
100 and Over45 Days

Why Redundancy Consultations are Essential

Many employers find the redundancy process challenging, especially as the prospect of letting staff go can feel like a business failure. However, ensuring that communication is good during the consultation period will help the individuals whose jobs are at risk know where they stand. It’s also vital to hold consultations as failing to do so could lead to fines being issued if an employee takes your company to tribunal for failing to follow the correct legal process.

Who Needs to Know About the Redundancies?

Before you can start the redundancy consultation, you have to make the Redundancy Payments Service aware of your decision and take the time to discuss the decision with Trade Union Representatives or other employee reps. Failing to have these conversations can have legal ramifications and stop your redundancy process, so it’s important to organise them before setting your consultation meetings with your employees.

Understanding Redundancy Notice

After the consultation ends, you will need to give termination notice to each employee that will be made redundant. This notice will state the official leaving date. You will also need to provide redundancy notice in line with their length of service:

Length of ServiceRedundancy Notice
1 Month – 2 Years1 Week
2 Years – 12 Years1 Week for Each Year Worked
Over 12 Years12 Weeks’

Remember that the redundancy notice periods set out above are the statutory minimum, meaning that you can increase them should you wish to. However, they cannot be reduced.