Making Redundancies In The UK

• Published date: 16 February 2023
• Subject Matter: Employment and HR, Unfair/ Wrongful Dismissal, Redundancy/Layoff
• Law Firm: Littler Mendelson
• Author: Ms Beth Thomas, Caroline Baker and Daniel Pollard

Redundancies continue to increase in the UK. US employers carrying out global RIFs need to plan for overseas consultation obligations, which can take considerable time and preparation. UK has a statute similar to US WARN that is triggered at 20 layoffs but individual consultation is still required for any number of layoffs.

With the number of UK redundancies during December 2022 having doubled compared to the same period during 2021 and a number of high-profile layoffs being announced daily, more businesses will likely have to make difficult decisions regarding potential reductions in their workforces in the coming months. This Insight highlights some of the legal and practical issues to consider when making reductions in force in the UK.

The UK does not have a direct equivalent of the U.S. WARN statute. Instead, even small-scale RIFs involving as few as one employee require individual consultation and can often take at least 14 days to implement. Collective consultation with elected representatives (even in non-unionised businesses) will be required if 20 or more employees are impacted and can require 45 days to implement.

(1) Plan

The more time spent planning, the more likely that the process runs smoothly and without claims or unsettling remaining colleagues. Begin by assembling a multi-disciplinary team that includes not just HR, legal and business management, but also payroll, benefits and internal/external communications specialists. The following issues are some of the key strategic points for consideration by HR teams and employers in anticipation of a potential RIF.

Timing is key

Planning at this stage must account for certain legal requirements in the UK, including minimum consultation periods and the requirement to notify the Secretary of State for the Department for Business, Energy and Industrial Strategy (BEIS) of the proposed redundancies where an employer is proposing to dismiss 20 or more employees at one establishment in a 90-day period:

• 30 days before the first dismissal takes effect for 20-99 redundancies; or
• 45 days before the first dismissal takes effect for 100 or more redundancies.

Failure to notify BEIS is a criminal offence.

Structure

• How will the redundancy process be structured? This question feeds importantly into the timing of the process, for example, will the redundancies be phased?
• It is also important to take some time to understand your workforce demographic - for example:
  
  • Do you have lots of employees with...