Collective consultation and the requirements that it has placed on employers has in recent months been the source of much discussion. The requirements to consult are clearly detailed in the Protection of Employment Act 1977 (the “Act”). However, a Rights Commissioner, has issued a very clear declaration that should employers not embrace the spirit of consultation and comply with the time requirements in the Act, they will be penalised.

Section 9 of the Act states that an employer seeking to make collective redundancies must consult with employees’ representatives with a view to reaching agreement on a number of matters.  Those matters include the possibility of avoiding the proposed redundancies, reducing the number of employees affected and the basis for selection of employees whose position will be made redundant. Consultations should be initiated at the earliest opportunity but in any event at least 30 days before the first notice of dismissal is given.  Section 10 of the Act requires an employer to provide certain information to the employees.

In a recent Rights Commissioner hearing it was held that Dell Computers must pay two weeks wages to 28 workers for failing to comply with the 30-day consultation period. Dell announced the potential redundancies and on the same day gave individual letters to a number of employees which gave details of the severance programme and estimates of severance payments that “might apply” (emphasis added). The Rights Commissioner held that due to the specific nature of the individual letters Dell Computers had breached Section 9 of the Act.

It is important to remember when dealing with a collective redundancy to fully and meaningfully consult with employees for the full 30 day period. No decisions regarding outcomes or even details of potential packages should be given to employees before the consultation period has elapsed.