Can firms be made to consult on lay-offs?

When a government minister makes an announcement in the
run-up to a general election it is bound to be viewed with suspicion. Can it be
any coincidence that trade secretary Stephen Byers’ announcement last week of a
review of rules on collective redundancies has come within weeks of  news of 
2,000 lay-offs planned at 
Vauxhall’s Luton plant.

But given that the redundancies were the result of a
decision made in the US head office of General Motors, Vauxhall’s parent
company: can the minister’s review stop this happening again?

The reality is that there are already a great deal of
regulations governing multinational companies operating in Europe. Since 1999,
UK firms have had to consult with elected representatives of staff when
announcing collective redundancies. And the European Works Council rules oblige
companies to consult over lay-offs when downsizing.

Unfortunately for the Government, however, world economics
is too complex for it to be able to legislate to avoid sudden shocks like that
at Vauxhall and Rover last year. Globalisation means organisations are
increasingly making tough decisions on where to deploy their labour force
internationally, and the example of Vauxhall shows that even European-wide
legislation has no jurisdiction over multinational companies.

HR directors are left between a rock and a hard place when a
parent company announces mass redundancies at one of their sites. In the
absence of information in advance, HR is left to implement what amounts to
damage limitation. It is important that HR directors implement policies which
are fair to staff and limit the damage done to employee relations among the
staff that remain. It’s not the most envious of the responsibilities of HR, but
it may be one of the most important.

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