Consultation period for collective redundancies

In response to its consultation on collective redundancy rules, the Government has announced that the current 90-day minimum consultation period where employers are proposing to make 100 or more redundancies at one establishment will be reduced to 45 days.

The rationale behind the response is to give businesses the flexibility to respond to changing market conditions and to restructure more effectively. Employment relations minister, Norman Lamb stated that the current rules are not fit for purpose for the modern labour market, and are not in the best interests of either managers or staff, as it means that uncertainty can overhang the workforce for three months.

Whilst the Government has rejected calls from employers for a 30-day minimum consultation period, their plans to halve the existing consultation period have sparked union anger. In particular, the Government’s intention to legislate to exclude the expiry of fixed-term contracts, which have reached their termination point, from the scope of the rules has been as a contentious move. TUC General Secretary Brendan Barber stated that “removing consultation rights from fixed term contract staff will seriously increase job and financial security for vulnerable groups of workers, and temporary staff will lose out on redeployment opportunities.”

The Government intends that the amended legislation and accompanying ACAS guidance will be in place for the common commencement date of 6 April 2013. It is expected that the Government will thereafter review the operation and impact of the shorter statutory consultation period on the labour market once it has had time to see its full effects.

For more information please contact David Hacker.