The recent £2 million protective award for almost 10,000 former employees of UK retailer Wilko is a clear reminder to employers about the importance of meaningful consultation during redundancy processes.
The employment tribunal ruled that Wilko failed in its statutory duty to consult staff properly before entering administration in August 2023. Despite its financial struggles, the judgment made clear that obligations under employment law, including collective consultation, cannot be set aside, even in times of crisis.
When organisations face large-scale redundancies, the legal requirement is clear: where 20 or more redundancies are proposed within 90 days at a single establishment, employers must collectively consult with elected employee representatives or a recognised trade union before making any redundancies. In Wilko’s case, it did not allow enough time to fulfil this duty, denying employees the chance to engage meaningfully with the proposals and resulting in financial penalties.
But beyond legal compliance, what practical support can employers offer staff during such challenging times?
Redundancy can be a deeply unsettling experience. Employers which place people and their best interests at the centre of their approach can help protect staff welfare, preserve morale and reduce legal and reputational risks. Financial support might include offering enhanced redundancy packages where possible, providing outplacement services, or facilitating access to independent financial advice. Some organisations also work with employee benefit providers to extend life or health insurance cover for a period post-employment.
Equally important is support for employees’ mental health. Employers can signpost staff to employee assistance programmes, counselling services or charities that specialise in redundancy support. Where budgets allow, organisations might offer wellbeing workshops or resilience training. Simple measures such as regular, honest transparent communication and opportunities for staff to ask questions can go a long way in reducing uncertainty and stress.
HR professionals have a central role in ensuring that consultation processes are not only legally compliant, but also fair and compassionate. Early involvement of HR, legal advisers and insolvency practitioners can help create a plan that balances commercial realities with the need to engage staff meaningfully.
The Wilko case highlights that meaningful consultation is not just a tick-box exercise, it is a statutory duty and a vital part of treating employees with dignity and respect at a difficult time. Employers that recognise this will be better placed to manage organisational change while supporting their people.
Simon Gilmour is a partner and head of employment at Harper James
