The firing line
Q. I am proposing to reduce a large number of employees I have at my firm because of a planned change in the company's structure. Are there any guidelines that I will have to follow and are there any penalties for failing to follow these guidelines accordingly?
A collective redundancy is a situation where there are 20 or more employees who will be dismissed as redundant within a 90-day period.
As an employer, by law, you owe your employees who are going to be affected by this collective redundancy appropriate information and consultation about your plans and an explanation for the decision. This applies to all employees who will be dismissed regardless of their length of service.
If the employees at your company are represented by trade unions, then the relevant trade union representatives must be informed of all the relevant information about the dismissals.
The employee representatives must be informed of enough information about the employer's proposals during a period known as the 'consultation period'.
As an employer you must disclose information on the reasons for the dismissals.
They should also be informed on how many employees are proposed to be made redundant and how these employees have been selected by the company.
The information about the amount of time an employee has before the dismissal will take effect must be disclosed and, most importantly, how the company will be calculating the redundancy payments.
An employer that fails to follow this consultation period accordingly and with enough critical information may be taken to a tribunal for failing to inform and consult in accordance with the statutory provisions. This complaint can be made within three months from the date the dismissal would take affect.
Should a tribunal find that a complaint by an employee is justified, it will make the necessary adjustments and steps to safeguard an employee's financial entitlements by making a 'protective award'. This protective award is where an employer is required to pay an employee's pay for each week of a specified period, regardless of whether or not they are still working. The length of this protective period will be determined by the tribunal, taking into account the extent of the employer's failure to comply with the information and consultation requirement, although there is a maximum period of 90 days limit to the length of time up to which this period can last.
- Peter Done, Managing director, Peninsula Business Services.
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