Employment Law Birmingham News

Recent high-profile job losses announced at HMV and Rolls Royce are a reflection of wider sentiment towards job security, with the beginning of 2013 seeing an overall drop in confidence among UK workers, according to Legal & General’s Job Security Index. 

The drop has been most notable among part-time workers, whose confidence in their job security is 10% lower than full-time workers.

The Job Security Index, which has been running since January 2012, shows that only 65% of part-time workers are confident about their job security compared to 75% of full-time workers.

In comparison to this time last year, confidence in job security has fallen further among part-time workers (from 69% in January 2012 to 65% in January 2013) than full-time workers (from 77% in January 2012 to 75% in January 2013).  Both part-time and full-time workers’ confidence in their job security was at a high of 73% and 79% respectively in October 2012.

This trend is mirrored by last month’s ONS employment statistics which showed that the number of people in part-time employment decreased by 23,000.

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.

Employees still face an uncertain future in 2013, as UK businesses are increasingly unsure if they will need to make redundancies over the next six months.

According to a survey of 783 UK businesses by Right Management, around one in twelve UK employers (8%) are uncertain if they will need to make redundancies in the next six months. This figure has risen by six percentage points in the last six months, up from just 2% in 2012.

The survey also reveals a slight drop in those reporting they will make no layoffs at all; 77% of employers feel they will make no layoffs at all in the first six months of 2013, down from 81% in 2012. However, this is a higher figure than the global average of 69%, and no employers reported they would make significantly more layoffs (down from 4% in 2012).

Only 22% of UK employers believe their companies are very effective at redeploying employees rather than making redundancies. This is a global problem, almost three in ten employers believe their organisations are “not too effective” or “not at all effective” at redeployment.

In response to the latest ONS labour market statistics, Gerwyn Davies, the Chartered Institute of Personnel and Development (CIPD)'s Labour Market Adviser, commented:

“In a continuation of recent trends, today’s official ONS employment figures appear to show yet another strong labour market performance.  However, a number of factors suggest that fault lines are emerging. For example, redundancy activity has picked up for the first time this year and there are record numbers of self employed and people working part time because they cannot find a full time job. There is also a continued increase in the number of people on government funded employment and training programmes.

“In addition, today's figures don’t reflect the lengths to which a significant number of employers are going to in order to hold on to skilled staff despite low levels of demand; as the CIPD reported in its quarterly Labour Market Outlook earlier this week. The continued fall in productivity and increase in unit labour costs will put more pressure on employers.”