Collective redundancy reforms announced by Government

Norman Lamb, the employment relations minister, has today announced the Government’s proposals to reform the rules for consulting staff about large scale redundancies.

According to a statement from the Department for Business, Innovation and Skills, the proposals are aimed at “improving the ability of companies to respond to changing economic conditions” and “improving the quality of the collective redundancies process”.

Following a call for evidence last year, a formal consultation has been published today which seeks views on a number of proposals including:

  • introducing a new, non-statutory, code of practice to give clearer information on how to conduct good quality consultations;
  • reducing the 90-day minimum period for collective redundancies of more than 100 staff to 45 or 30 days; and
  • improving the guidance for employers and employees on the support on offer from the Government.

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.

He continued: “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.”

EEF head of employment affairs Tim Thomas said: “We broadly welcome these proposals as the law in this area strongly favours employees and their representatives which can lead to prolonged periods of uncertainty. This needs to be rebalanced and greater emphasis placed upon the protection of employment for all workers. The 90-day consultation period can delay the resolution of redundancy consultations and employers will welcome a move to 30 or 45 days.

“However, we are disappointed at the decision not to consider the position of protective awards, which are an unnecessary example of gold-plating and a disproportionate penalty for employers. They do little to encourage swift and flexible settlement and are out of step with the median level of awards for other forms of claim.”

Commenting on the announcement, TUC general secretary Brendan Barber said that the current 90-day consultation rules work 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.”

More detail on the collective redundancy consultation is available on XpertHR.

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