Within the EU there is core legislation on collective redundancies that applies to all member states. This derives from EU Directive 98/59/EC, originally passed in 1975.
The Directive requires that employers contemplating collective dismissals follow certain procedures. Member states have some flexibility in choosing how to define a collective dismissal, but typically it involves dismissing 20 or more employees over a period of 90 days, or the lesser of 10% of the employees or 30 employees over 30 days. Where the law applies, the employer must carry out a number of obligations before the projected redundancies. These include:
* Providing employee representatives with information on the reasons for the redundancies, the number of employees affected, the selection criteria to be applied in determining which employees are to be maderedundant and whether there will be any enhanced redundancy payments, and
* Consulting employees and/or their representatives on how to avoid collective redundancies, how to reduce the number of employees affected and how to mitigate the consequences by measures aimed at redeploying or retraining employees.
Although there is no requirement to reach agreement through consultation, the employer must demonstrate that they have genuinely sought to reach an agreement.
The relevant state authority must be notified about the outcome of the consultation and dismissals may not take effect earlier than 30 days after notification.
In practice, an employer proposing a collective redundancy will find that there are significant differences between member states. For example, penalties for non-compliance in some countries are financial, in others employees must be reinstated.
Especial care must be taken where employers are reducing headcount across a number of countries, particularly if the justification for the redundancies is the same. If the process in one state moves ahead faster than in another, employee representatives may argue a lack of proper consultation or regard ongoing consultations in a particular country as not genuine. For this reason the process should be managed centrally within the organisation, the timing of key decisions closely coordinated and the links between workforce representatives clearly understood and taken fully into account.