General Electric – Proposed Redundancies

Andrew Lester, Employment Law Director here at ORJ explains about the proposed redundancies at General Electric in Stafford, and how the process works in this scenario.

General Electric announced in December 2017 that it will be slashing 1,100 jobs across its UK operations, mainly in Stafford and Rugby (with up to 500 jobs going at the Lichfield Road site in Stafford). This sadly brings into focus the law and the requirements relating to collective redundancies.

We have set out within this article, for anyone affected by this recent announcement, the key facts and law relating to collective redundancies.

If an employer is proposing to make 20 or more employees redundant at ‘one establishment’ within a 90 day period, this is known as a collective redundancy.  The employer has a specific legal obligation to consult with affected employees’ recognised Trade Union or elected employee representatives.

Consultation must take place:

  • At least 30 days before the first dismissal takes effect where 20-99 redundancies are proposed within a 90 day period; or
  • At least 45 days before the first dismissal takes effect where the employer is proposing to dismiss 100 or more employees within a 90 day period

Employers must consult with the recognised Trade Union, even where employees are not members of the union; or If there is no recognised trade union,  with elected employee representatives: or If no such elected representatives exists, arrangements must be made for employees to elect representatives.

Obligation to consult includes employees who are not at risk of redundancy as the proposed changes will have an effect on the wider workforce.

For the purpose of consultation, employers must provide the following information:

  • Reasons for proposed redundancies;
  • Number and description of employees it is proposing to dismiss;
  • Proposed selection method;
  • Proposed procedure and time limits for redundancies;
  • Any ways of avoiding redundancies and how to keep numbers to a minimum; and
  • Proposed method of calculating any enhanced redundancy payments.

An employee’s Trade Union or employee representative can advance arguments on behalf of employees at risk as to potential ways of avoiding redundancies, such as working shorter hours, salary cuts, voluntary redundancies and early retirements.

Failure to Consult

No dismissal should take effect until the consultation is completed and the minimum period above has been given. Where an employer fails to comply with the minimum length of notice of consultation required, the employer will be in breach of the collective consultation rules and each employee will be entitled to an award of up to 90 day’s pay.

A claim for failure to consult must be presented to the Tribunal within three months of the date the dismissal takes effect.

You may also be interested in Andrew Lester’s FAQ page about Employment Contracts.

For more information on Collective Redundancies or if you are one of the many people at risk of redundancy at GE Power, please contact ORJ’s specialist employment lawyers on 01785 223440 or at Andrew.Lester@orj.co.uk for a free consultation.