Must we consult for the minimum period if the business is likely to close?
- 20 to 99 redundancies – the consultation must start at least 30 days before any dismissals take effect.
- 100 or more redundancies – the consultation must start at least 45 days before any dismissals take effect.
However, if is likely that the business will not be in a position to trade that long, the requirement for consultation is to act reasonably. It is not legal to continue to trade once an organisation is insolvent, as this would make directors personally liable for any obligations, as well as incurring potential criminal liabilities for trading whilst insolvent.
The best course of action is to enter into consultation as soon as possible – unless there are strong commercial reasons for not divulging the precarious state of the business. It is unlikely to be considered reasonable to engage in no consultation, but if it is not possible to consult for the timescales set out above, it could be acceptable as long as all reasonable attempts at consultation have been made.
For more information, HR help and support on any of the HR topics listed here, contact Karen Scott on 07762 629 448 or get in touch by clicking here.
