As employers, you need to be consulting with all of your staff if:
you are starting a redundancy process (NB there are more extensive collective consultation rules if 20 or more jobs may be at risk)
you’re transferring them to a new employer (under the TUPE transfer rules) because you’re restructuring or selling your business
you’re otherwise changing their terms and conditions (e.g. to require them to work from home permanently or more often; you’re agreeing flexible working arrangements, such as changes in work start and end times; you’re changing pension scheme arrangements, etc.) (collective consultation rules also apply here for 20 or more staff affected)
you’re carrying out the obligatory Covid-19 workplace risk assessment so that you can bring employees back to the workplace safely (and you’ll need to publish that assessment on your website if you have more than 50 employees)
‘Employers’ are defined very broadly for these purposes, encompassing companies, partnerships, co-operatives, mutual, building societies, associations, trade unions, charities and even some individuals and sole traders - if they are employers who carry out an economic activity. Schools, colleges, universities, NHS trusts, and central and local government bodies are also required to comply.
‘Employees’ are employed members of staff. The consultation obligations do not extend to workers or to contractors that employers may also engage.
All staff are entitled to be consulted on all of the above topics, no matter how big or small your business, and to understand what any news or proposed changes may mean for them individually.
Collective and more formal consultations may then be needed for larger employee groups who may be affected by a business’ intended actions, or for larger businesses of a particular workforce size. This guide focuses principally on those 2 scenarios.
However, please note that the Covid-19 workplace risk assessments must be conducted so as to take into account the very specific needs of each individual staff member, even one of whom will need to be considered and to be provided with the information and the chance to ask questions. Each individual needs to understand why you’re taking (or not taking) particular measures and its impact on them personally.
Some staff members will be more at risk when returning to work or continuing to operate in busy workplaces than others.
All employers, regardless of their workforce size, must take into account those who are clinically vulnerable, or are shielding others who are, or whose personal circumstances (e.g. childcare arrangements) have been affected by the pandemic. And they must comply with the Health and Safety rules.
Requests for information and consultation
In addition to the above consultation obligations, for larger employers, employees may also be able to request, in writing, that you inform and consult with them on matters that they want to know about.
For businesses employing more than 50 members of staff, the law previously required that where 10% or more of those staff members request information and consultation about their employer’s activities or plans, which would include all of the above activities (and more), employers must comply with that consultation request.
A lower request threshold: widening the consultation obligations for employers with 50+ employees
An update to the rules, brought in by the government on 6 April 2020, lowers this normal 10% threshold for these consultation requests to 2%, provided that 2% of requesting employees equates to 15 or more employees in the employer’s workforce.
If fewer than 15 employees request the consultation or the business has fewer than 50 members of staff, the rules do not apply.
In addition, if the number of employees requesting information and consultation arrangements reaches 40% of more of the employed workforce, then the employer needs to go further and start negotiations about those consultation arrangements with its employees, who are entitled to a say in how the consultation is run and managed.
If more than 15 but fewer than 40 employees request the information and consultation, employers can run a ballot to ask employees to vote on whether they want to negotiate on how the consultation will be arranged. In these circumstances, the vote will only be considered passed in favour of negotiating on the consultation arrangements where:
- the majority of voting staff request it, and
- those voting in favour represent more than 40% of the workforce.
If the vote is successfully passed in favour of employee negotiation on the consultation arrangements, agreement on how the consultation will operate must:
- be captured in writing
- be approved by all employees (via ballot or elected employee representatives can sign it on behalf of all, if they’ve carried out their role properly), and
- contain clear explanation of how the employer will provide the information, what information will be provided (and not provided), and how the consultation element will be conducted.
Penalties and excuses for not consulting where you should
If you hit the thresholds triggering the consultation rules, you must follow them.
Not following the rules properly means that in the face of an Employment Tribunal challenge by one or more members of your staff, (likely triggered by their disagreement over how they have been affected by your redundancy process, change to their contract, safety at work measures), you’ll face:
- penalties of up to 90 days’ pay for each affected employee (with no maximum cap); and
- it is a criminal offence to fail to notify the Secretary of State on the appropriate form, where 20 or more employees are affected within a 90 day period and you have not collectively consulted with them. Both the employer business and, potentially, individual directors/managers, face this criminal conviction, if the breach of the notification rules is proved to have been knowingly or neglectfully committed by them, or with their knowledge/involvement.
The defence of ‘special circumstances’
The defence that employers facing employment tribunal actions may attempt to run is that in all the circumstances, there was literally no time or opportunity to consult with staff members. It is quite hard to prove and not often successful.
Experts consider this is particularly unlikely to stand up to scrutiny in most Covid-19 ‘failure to properly consult’ situations and that employment tribunals are likely to be unsympathetic to the argument, given the existence of the furlough scheme and all the government financial reliefs available to businesses, all of which are designed to buy businesses more time to organise themselves and to look after their staff, among other things. Conversations with staff – individually and collectively – are happening, in many cases daily, as a matter of course and necessity because of Covid-19’s impact on working arrangements in any event.
What must consultation involve – and what time-table should it work to?
Simply put, to ‘inform’, means you should tell employees what is planned.
‘Consultation’ means you must listen to employees’ responses to what you tell them and properly take into account their views when deciding what to do. You must be able to evidence that you did this in your records too.
What you consult on
The topics for consultation are broad and largely a matter for the employer and employees to discuss and agree.
However, the law does set out ‘Standard Provisions’, which must be consulted on. These include:
- the financial/economic health of the business
- employment prospects within the business
- decisions likely to lead to substantial changes in work organisation or contractual relationships (e.g. collective redundancies and/or TUPE transfers fall into this bucket – as do the new Covid-19 return to work and health and safety considerations)
You can see how all the topics listed at the top of this guide fall into one or more of the above ‘buckets’.
These consultations won’t normally include negotiation relating to an individual’s employment terms or situation, or individual grievance and/or disciplinary issues.
Format and logistics
The format of the consultation process must also be agreed, e.g.:
- timings of meetings
- who will attend
- rights and obligations of employee representatives who attend
- how data and confidentiality will be handled, and
- how minutes of the meetings will be circulated, so that all those not present can be informed and presented with the opportunity to express their views (so that they can be taken into account also), as soon as possible afterwards.
If your business is unionised, you’ll need to involve trade union representatives in your consultation processes too. Remember that in businesses with a trade union presence, unions are entitled to appoint health and safety representatives for your business, to ensure that those representatives attend your safety committee meetings and to consult with you on your health and safety measures, especially their adequacy and legal compliance.
How you do collective consultation effectively
Arrangements will vary from one employer to the next, and that makes sense because of the variety of businesses covered and the way they operate daily. The topic of the communication itself may also influence the choice of how to communicate it to staff.
The legal duty on employers requires ongoing communication, meaning that however you do it (and you need to do it properly), you are communicating, meaningfully, truthfully and transparently, any and all important developments that could affect the individuals who work for your business.
Announcements from the business’ leadership tend to get employee attention, so they’re very effective as a first means to communicate news and to invite employee engagement. They provide context, carry gravitas, and give managers the ability to refer to such announcements when they invite staff for whom they are responsible to ask questions and discuss what it means for them.
Small group meetings with managers may be appropriate to communicate and discuss information about the business’ financial and commercial performance, and what that means for the future.
Surveys can be used to gauge staff sentiment about particular courses of action – provided that staff are properly informed about the survey, the context of it is clearly explained, they are able to access it and the questions are suitably worded so that they can properly express their views and make informed and constructive choices and contributions.
Other methods, which can be appropriate for some topics and/or can be used very effectively to reinforce communications occurring in other channels, may include:
- intranet announcements, for those who have internal notice boards that all staff can access and use (this is a good place to post minutes of consultation meetings that have happened and to communicate about future ones and the topics that will be discussed)
- email newsletters/their equivalent from the management
- team briefings – especially if the news is included in briefings that are taking place as a regular course
- video or teleconferencing (video is better, though in many businesses, even on their phones, not all staff can access it. So be mindful of technological limitations of individuals, especially in times of remote-working and furlough, where staff are not carrying out their contracted duties in their usual working circumstances)
- larger businesses may want to set up employee-employer consultative committees or a staff council. These help build trust between employers and their staff and these regular meetings help to ensure that staff have and appreciate having a voice and the ability to make useful and relevant suggestions. They’re also an efficient means to ensure that an employer’s core messages and other consultation/communication actions are getting to its employees.
Trade unions and their representatives must also be taken into account in the communications and consultations activities that you undertake. As we pointed out earlier, where your business is unionised, you may have additional steps to meet.
Above all, employers should be aiming to communicate clearly and regularly about all relevant topics affecting their staff, both the good and the more challenging ones, so that any worrying announcement likely to cause concern or alarm among the workforce doesn't come as a complete shock or nasty surprise.
No member of staff should ever be penalised (including being made redundant/dismissed) for asking questions.
Ensuring effective consultation with remote working or furloughed staff
Consultation requirements remain the same for furloughed and currently remote/home-working staff.
The government has made clear that it is not a breach of the furlough scheme rules to consult with furloughed employees about the topics contained in this guide, and the same applies to appointing a furloughed member of staff as an employee representative for collective consultation purposes. Take care to ensure that the consultation interactions do not, however, extend beyond the consultation topics and actions.
Staff coming straight back to their old job, on unchanged terms, should ideally still be given 48 hours’ notice, so they can make appropriate arrangements for any adjustments to their working arrangements (e.g. organise their travel plans, childcare arrangements, etc.).
Those not coming back to the same terms, or facing a redundancy process, where collective consultation is relevant, must be treated fairly, as compared with all other staff who have not been furloughed/who are presently remote homeworking.
Many businesses who continue to struggle through the remaining months of the furlough scheme may wish to delay redundancy considerations until the expiry of the scheme is more imminent.
BUT, consultation on redundancy needs to start as soon as there is a proposal to dismiss staff for redundancy reasons and there are legal time frames for consultation that must be adhered to. (20 or more employees proposed for redundancy over a 90 day period = minimum 30 days consultation for collective redundancies of 20-99 staff; minimum 45-day consultation period for 100 or more employees.)
So, it is essential that employers look at the time frames for collective redundancy consultations and factor these into any cashflow and headcount planning, potential redundancy process and legal timetable that they put in place.
Final word of warning:
Keep a level playing field. Do not treat furloughed or Covid-19 home-working staff as the only pool of candidates for redundancy. This applies in spite of you running a robust selection process relating to who would be furloughed or not.
All staff must be considered against your redundancy criteria, fairly and thoroughly and your criteria and assessment should ideally take into account the pre-Covid-19 needs of the business, as well as the position now.
And remember that during any redundancy process, you are still under a duty to consider all reasonable alternatives to redundancy for each affected employee. Furlough status does not remove this duty.
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