Debenhams loses redundancy case
Debenhams is one of a long list of retailers lost to the High Street due to challenging trading conditions. The Employment Tribunal (ET) has recently found in favour of more than 400 former Debenhams staff who will receive a payout.
Redundancy is a form of dismissal from a job. It happens when employers need to reduce their workforce. If someone is being made redundant, they might be eligible for certain things, including:
- redundancy pay
- a notice period
- a consultation with their employer
- the option to move into a different job
- time off to find a new job.
A person is entitled to a consultation with their employer if they are being made redundant. This involves speaking to them about:
- why they are being made redundant
- any alternatives to redundancy.
If an employer is making up to 19 redundancies, there are no rules about how they should carry out the consultation. If they are making 20 or more redundancies at the same time, the collective redundancy rules apply. Debenhams fell foul of this requirement.
Collective redundancy rules
If an employer is making 20 or more employees redundant at the same time, the consultation should take place between the employer and a representative (rep). This will either be:
- a trade union rep, or
- an elected employee rep.
Collective consultations must cover:
- ways to avoid redundancies
- the reasons for redundancies
- how to keep the number of dismissals to a minimum
- how to limit the effects for employees involved, for example by offering retraining.
The employer must also meet certain legal requirements for collective consultations.
Length of consultation
There's no time limit for how long the period of consultation should be, but the minimum is:
- 20 to 99 redundancies - the consultation must start at least 30 days before any dismissals take effect
- 100 or more redundancies - the consultation must start at least 45 days before any dismissals take effect.
The ET held that Debenhams had failed in its duty to provide a consultation period for those employees at risk of redundancy. The case is an important reminder that a messy demise of a business does not allow an employer to ignore its duties to its employees.
To discuss this or any other employment matter, contact us.