Collective redundancy consultation changes

Posted: 19th December 2012

BISUnder the law at present, if an employer is proposing to make redundant 20 or more employees at one establishment within a period of 90 days or less, the collective consultation provisions of Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 come into play. Where the employer is proposing to dismiss
100 or more employees, the consultation period must be at least 90 days; otherwise it must be at least 30 days.

As part of its review aimed at streamlining employment law and establishing conditions that will ensure a flexible labour market, the Government consultated on whether the 90-day minimum consultation period where more than 100 redundancies are contemplated should be reduced. In the light of this, the Government has now announced that it plans to:

  • reduce the current 90-day minimum period, before large scale redundancies can take place, to 45 days;
  • legislate to make it clear that fixed-term contracts that have reached the end of their natural life are excluded from obligations for collective redundancies consultation; and
  • introduce new non-statutory Acas guidance to address a number of key issues affecting collective redundancies consultation.

Commenting on the decision to reduce the consultation period where the employer proposes to make redundant 100 or more employees, Employment Relations Minister, Jo Swinson said, “The process is usually completed well within the existing 90-day minimum period, which can cause unnecessary delays for restructuring, and make it difficult for those affected to get new jobs quickly.

“Our reforms will strike an appropriate balance between making sure employees are engaged in decisions about their future and allowing employers greater certainty and flexibility to take necessary steps to restructure.”

Draft regulations will be laid in the New Year and the changes are expected to be made by 6 April 2013.