Consultation opens on collective redundancies

The Government has published a consultation on collective redundancies, which outlines the proposed measures to change the way in which collective redundancies are made. This would include:

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

Employment Relations Minister, Norman Lamb, said:

“It is never easy for employers or employees when redundancy is a possibility, but it’s clear that the current arrangements are not working in the best interests of either staff or managers.

“Our reforms are about improving the quality of consultations – this really is a case of quality over quantity. The call for evidence showed that the current arrangements are not fit for purpose for the modern labour market and I would encourage people with an interest to get involved in the consultation. At present fear and uncertainty can hang over a workforce for three months, sometimes resulting in some of the best employees choosing to leave, even if they would not have ultimately been made redundant.”

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There are some elements that the Government proposes to leave unchanged, including the Protective Award. This Award currently stands at a maximum of 90 days’ pay for each employee affected by a failure to consult and is paid by the employer.

However, TUC General Secretary, Brendan Barber, said that the current 90-day consultation rules on redundancy are working perfectly well.

“Any reduction in the time period in which employers must consult with their workforce over potential job losses will make what is already a deeply unsettling time much more difficult for everyone involved.”

He added:

“We are pleased however that the Government is not intending to change the system for protective awards where employers fail to consult over planned redundancies.”

The consultation is open until 19 September 2012.