By Daniel Hunter
A new package of proposals to reform rules for consulting staff about large scale redundancies was published today (Thursday) by Employment Relations Minister Norman Lamb.
The new measures, outlined in a consultation, are aimed at improving the ability of companies to respond to changing economic conditions and improving the quality of the collective redundancies process. The process will also help to relieve the impact of uncertainty suffered by all employees over a long period of time.
Currently large employers have to consult with their staff for 90 days if there is a threat of large scale redundancy. Ministers want to reduce this period and to produce a new Code of Practice to improve the quality of communication between managers and staff, to reduce uncertainty and to make sure that employers can better respond to changes in market conditions.
Last year the Government carried out a Call for Evidence which concluded that there was a need for change. Today, a formal consultation has been published 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 large redundancies (over 100 staff) to 45 or 30 days
- Improving the guidance for employers and employees on the support on offer from the Government
“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," Employment Relations Minister Norman Lamb, said.
“Our reforms are about improving the quality of consultations - this really is a case of quality over quantity. The call for evidence showed that the current arrangements are not fit for purpose for the modern labour market and I would encourage people with an interest to get involved in the consultation.
"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 changes will mean that employers can restructure more effectively and that the workforce is more flexible, while ensuring that employees have access to good quality consultations. The Government believes that this will mean that better decisions are made and limit the uncertainty and stress of the redundancy process.
As well as these important proposals for change, there are some elements that the Government propose to leave as they are, most notably the Protective Award. The Protective Award currently stands at a maximum of 90 days’ pay for each employee affected by a failure to consult and is paid by the employer. As the level of the award is linked to the employer’s attempts to comply (and not to the length of the consultation period) we believe that this penalty is an effective deterrent.
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