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Mass redundancies – the legal requirements that must be met

On 22 March 2022 two parliamentary select committees questioned the CEO of P&O Ferries over its dismissal of 800 employees without either prior consultation with UK workforce representatives or prior notification to Government.

In the evidence which followed, the company’s CEO conceded that neither a consultation nor the notification process had formally taken place. He stated the company had not consulted with workforce representatives and compensated affected staff instead.

On 1 April 2022, the Inspector General and Chief Executive of the Insolvency Service wrote to the Secretary of State for Business, Energy and Industrial Strategy (BEIS), stating formal criminal and civil investigations had begun into the circumstances surrounding the redundancies at P&O Ferries; and, in turn, put mass redundancies under the spotlight.

There are legal requirements that employers planning mass redundancies should meet, including:

The specifics of these twin, cumulative obligations are important and detailed below:

Duty to consult the workforce (collective consultation)

Duty to notify BEIS

Individual consultation

In addition, employers must also consult individually with potentially redundant employees if they are to secure a fair dismissal. For example, consultation with the trade union over selection criteria does not release the employer from consulting with each employee individually their potential selection for redundancy.

The impact

There are already proposals to tighten regulation following the P&O case as the Transport Secretary announced measures to protect seafarers' employment rights, including:

To find out how our legal team can help you with workforce changes including redundancies and consultations, please contact Charlie Barnes.

authors:charlie-barnes