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Subscribe to this list via RSS Blog posts tagged in Collective Redundancy Advice Lawyers Bournville

The Government has recently announced details of the latest in a series of proposed employment law changes, with the focus this time falling on collective redundancy rules.

The announcement comes as part of the Government’s commitment to review employment law to support business and concentrate on growth. It follows a consultation exercise launched in June 2012. 

Background

The Coalition Government started a systematic review of employment law in 2010. This Employment Law Review is now halfway through and, according to the Government, aims to provide clarity, certainty and give businesses the confidence to manage their workforce effectively. 

The Review sits alongside the Employment Law-related Red Tape Challenge to reduce regulatory burdens on business.

Proposed changes

The latest proposed changes include:

  • reducing the current 90 day minimum period, before very large scale redundancies can take place, to 45 days,
  • legislating to make clear that fixed term contracts that have reached the end of their natural life are excluded from obligations for collective redundancies consultation, and
  • introducing new non-statutory Acas guidance to address a number of key issues affecting collective redundancies consultation.

Minimum period

According to the Government, the replacement of the current 90 day period to 45 days will still allow full employee engagement and offer employee representatives a statutory right to contribute to the process. 

The Government has also stressed that the new 45 day period will be a minimum period, and businesses may consult for longer where appropriate.

Mixed reactions

Reaction to the Government’s proposals has been mixed. 

The Institute of Directors welcomed the news, with Alexander Ehmann, Head of Regulatory Policy at the Institute of Directors, commenting that companies that are facing problems have to be able to restructure swiftly, and that a 45 day consultation period brings the UK closer to a number of EU competitors.

Trade union Unison, however, greeted the proposals with dismay, describing the reduced consultation time as “a cruel blow for workers and their families.”

Timescale

There is a short timescale laid out by the Government. It intends to lay draft regulations early in 2013, and the changes are expected to be made by 6th April 2013.

The Government has launched a consultation on proposed changes to the rules on consulting staff about large scale redundancies.

Currently large employers have to consult with their staff for 90 days if there is a threat of large scale redundancy. Ministers want to reduce this period and to produce a new Code of Practice to improve the quality of communication between managers and staff, to reduce uncertainty and to make sure that employers can better respond to changes in market conditions.

Last year the Government carried out a Call for Evidence which concluded that there was a need for change. The formal consultation seeks views on a number of proposals including:

  • Introducing a new, non-statutory, Code of Practice to give clearer information on how to conduct good quality consultations.
  • Reducing the 90-day minimum period for large redundancies (over 100 staff) to 45 or 30 days.
  • Improving the guidance for employers and employees on the support on offer from the Government.

The consultation will run for 13 weeks closing on 19th September.

The TUC has warned against reducing consultation rights during collective redundancy exercises, claiming that it could cost jobs, damage workforce morale and increase unemployment.

The government is considering whether the 90-day consultation period, which applies when more than 100 jobs are at risk of redundancy, should be reduced to make it easier, quicker and cheaper for employers to lay off staff. The TUC argues that cutting back these consultation rights would be detrimental for employers, employees and the wider economy.

Longer consultation periods provide time for employers and unions to explore all alternatives to redundancies, including identifying new orders, efficiency savings, restructuring, and recruitment freezes.

According to the TUC, the 90 days minimum consultation periods provide time for effective redeployment exercises, to ensure any selection processes are fair and for employers and unions to agree redundancy packages which assist workers in getting training and paying bills until they find new employment. It also provides time for union learning reps and government agencies to provide access to training, advice and job search support to those at risk of redundancy.

The TUC believes any reduction in the 90 days minimum consultation period will send a signal to employers that they need not prioritise exploring ways of saving jobs. This could lead to increased unemployment and more reliance on the welfare benefits, and would also have a detrimental impact on local economies and communities - particularly those areas of the UK where unemployment is already high and where there are limited job vacancies.

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