Collective Redundancy Consultation – Government Announces Changes

May 7, 2014

Collective Redundancy Consultation – Government Announces Changes

As part of the Government’s review of employment law, the Department for Business, Innovation and Skills (BIS) carried out a consultation exercise on possible changes to the rules on consultation when large-scale redundancies are proposed.

As a result, Employment Relations Minister Jo Swinson has confirmed that where an employer is proposing to dismiss 100 or more employees, the consultation period will be reduced from the current 90-day minimum period to 45 days. In addition, the Government proposes to:

  • legislate to make it clear that fixed-term contracts that have reached the end of their natural life are excluded from obligations for collective redundancies consultation; and
  • introduce new non-statutory Acas guidance to address a number of key issues affecting collective redundancies consultation.

Commenting on the proposals, Ms Swinson said, “Our reforms will strike an appropriate balance between making sure employees are engaged in decisions about their future and allowing employers greater certainty and flexibility to take necessary steps to restructure.”

Welcoming the announcement, Neil Carberry, director for employment and skills at the CBI, said, “The priority for businesses is meaningful consultation. A shorter consultation period will reduce uncertainty for staff and allow businesses to focus on the future more quickly.”

However, TUC General Secretary Brendan Barber opposed the measures. In his view, “The last thing we need is for the Government to make it easier to sack people. Unemployment has not gone as high as many feared because employers have worked with unions to save jobs, even if it has meant sharing round fewer hours and less work.” He called the suggestion that an employer will be more likely to take on extra staff because the statutory redundancy consultation period has been reduced from 90 to 45 days ‘close to absurd’.

Draft regulations will be laid in the New Year and the changes are expected to be made by 6 April 2013. Further details can be found on the BIS website.