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Collective redundancy consultation periods

Posted on 18th January 2013
New legislation

From 6 April 2013 the following changes will come into effect relating to collective redundancies.

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Simon Quantrill Simon
Managing Partner Telephone: 01473 688100
  • The 90-day minimum consultation period before the first redundancy can take effect is reduced to 45 days where 100 or more employees are affected. The existing time limit of 30 days where 20 or more employees are affected remains unchanged.
  • Employees on fixed-term contracts "which have reached their agreed termination point" are excluded from the collective redundancy consultation obligation. This deals with a case law decision which created unwelcome confusion.
  • A new Acas non-statutory code of practice will be introduced to improve the quality of consultation and provide guidance on difficult issues such as the meaning of "establishment". Of course, it would be much more sensible for the confusion surrounding this definition to have been resolved by incorporating it in the amended regulations. Unfortunately, this is not going to happen.

In practice

Overall the change to the 45 day minimum consultation period makes sense. Invariably if large scale redundancies are required, time is in short supply and it imposes an unnecessary financial burden on the affected business if it cannot dismiss redundant employees for at least 90 days.
The difficulty with this change is that it is good insofar as it goes. More could have been done to help employers meet their obligations with the minimum of uncertainty. The failure to deal with the meaning of "establishment" is a key example.
Employers must also remember that in most cases there will continue to be an ongoing obligation to ensure that meaningful individual consultation takes place with each affected employee. Missing out this important step may very well mean that a dismissal will be unfair and/or discriminatory.

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