Rules on large redundancies set for shake-up

Proposals that could cut the length of time employers have to consult with their employees on large scale redundancies by up to a third have been published by the government.

The new measures, outlined in a consultation launched by Employment Relations Minister Norman Lamb on 21 June, are designed to improve the ability of companies to respond to changing economic conditions and the quality of the collective redundancies process.

Currently, employers wishing to make more than 100 staff redundant have to consult with staff for 90 days. Ministers want to reduce this period, to 45 or 30 days, and to produce a new Code of Practice, to improve the quality of communication between managers and staff and reduce uncertainty for those involved.

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. 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.”

The government says that the changes will enable employers to restructure more effectively while ensuring that employees have access to good quality consultations.

The government does not propose to change the Protective Award, which currently stands at a maximum of 90 days’ pay, paid by the employer, for each employee affected by a failure to consult.

The consultation will close on 19 September.

Link: Consultation information