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Collective redundancy

We have written about the collective redundancy changes in our earlier articles. The key implementation challenge is tracking headcounts and thresholds across multi-site operations: further regulations to define the 'threshold number of employees' (which cannot be set below 20) are pending.

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A retail chain planning to close 15 stores, each employing 18 employees, might previously have avoided collective consultation obligations on an establishment-by-establishment basis. Under the Act's aggregated approach, the total headcount of 270 may well trigger enhanced consultation duties. More challenging, however, will be where the dismissals are harder to track. If the same retail chain employing 20,000 people nationally allows each store to make decisions as to its own staffing requirements; based on local demand, and a total of 50 employees are dismissed by reason of redundancy by 30 different stores, all acting independently, this could also trigger collective consultation obligations that lead not only to the increased protective awards of 180 days' gross pay for each affected employee, but also potential criminal liability if a duty to submit the HR1 form is also missed. It will also be hard to see the benefit of a collective consultation process in this instance, given that the dismissals may be brought about by very different circumstances.