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Government to reduce the consultation period for collective redundancies

25th July 2012

The Government has issued a consultation paper on the subject of the consultaiton process for collective (ie large scale, where at least 20 people are at risk of redundancy) redundancies. The aim that the Government has expressed is to improve the quality of consultation as well as the ability of employers to respond effectively and promptly to changes in market conditions. Concerns with the current system that the Government has identified include the slowing of the ability of businesses to restructure in the UK compared to other countries, as globalisation has made markets increasingly competitive.

Under the current system the law requires a minimum consultation period of 30 days when there are between 20 and 99 redundancies proposed by an employer; and a minimum period of 90 days when 100 or more redundancies are proposed by an employer.

The proposal being made by the Government is that the minimum consultation period should be reduced to between 30 and 45 days. The Government believes that a shorter period of consultation period will reduce uncertainty for employees, and will improve their morale, as well as putting those employees in a better situation in the market place for finding alternative employment opportunities.

In addition to reducing the minimum consultation period, the Government will publish a non-statutory Code of Practice to encourage better quality consultation. The Code will, among other things, cover the following points:-

-Clarify when consultation should start,

-Clarify which employees are covered by the consultation,

-State who should be consulted,

-Clarify how the consultation should be conducted, and

-State what is to be discussed in the consultation.

The Government's consultation process is due to close on the 19th September 2012.

In our view reducing the consultation process, as suggested, should make the whole redudnancy process less stressful for all those concerned. Th current minimum consultation process is a cuase of worry and stress to both employers and employees. employees can see the current minimum consultation period as a hinderance to their efforts to find and start in a new job, and be a cause of stress as it prolongs the uncertainty surrounding their situation (which in reality is often an inevitable redundancy). For employers they can see the current process as a major hinderance from moving on with necessary changes and restructuring to their businesses. Our experience is also that all too often representative unions spend much of the time simply objecting to the redundancies in principle instead of putting forward alternatives. In addition, when they get round to realising that the redudnancies will be happening despite their objections they have reduced time in which to put forward alternatives or negotiate acceptable deals for their members. In reality most employees want to know what payments they will receive, so that they can plan for their futures (including budgeting in a period of expected unemployment). So the current system often produces too long a period between being notified of the risk of redundancy and the potential start date with a new employer.

We also hope that the Code will be of practical benefit, and provide useful guidance on the consultation process (which can often be ineffective).

At Hallett Employment Law Services Ltd we can give you advice on the issues raised in this article, and guide you through the consultation process. If you need our help do not hesitate to contact us.   

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