By Ben Simmons
Reducing consultation rights during collective redundancy exercises could cost jobs, damage workforce morale and increase unemployment, the Trades Union Congress (TUC) warns today (Monday).
Currently, where employers are proposing to make between 20 and 99 employees redundant, they must allow for at least 30 days consultation with unions or workplace representatives before any job cuts can take effect. Where 100 or more jobs are at risk the consultation period must last for at least 90 days.
“Genuine consultation between unions and employers is vital in a redundancy process, regardless of how many people are at risk of losing their jobs,” said TUC chief Brenden Barber. “Working together, unions and bosses can decrease the number of job losses, avoid compulsory redundancies and ensure that the redundancy process is fair. They can also retain skilled staff and maintain morale amongst remaining staff.”
The government is considering whether the 90-day consultation period should be reduced to make it easier, quicker and cheaper for employers to lay off staff. The TUC argues that cutting back these consultation rights would be detrimental for employers, employees and the wider economy.
Genuine consultation and effective negotiations between unions and employers can deliver genuine benefits, says the TUC, by lowering job losses, avoiding compulsory redundancies, and assisting employers to retain skilled staff. The process helps to ensure restructuring exercises are transparent and fair.
During the last recession many private sector employers worked with unions to find ways of avoiding mass redundancies and retaining skilled staff. A recent TUC survey of workplace reps revealed that more than a third (36 per cent) of employers were willing to agree to longer consultation periods than the statutory minimum, often willing to consult for 90 days or more when far fewer than 100 redundancies were planned.
The TUC believes that effective working relations between employers and unions help to avoid job cuts and to maintain the morale and loyalty of staff who survive restructuring exercises. For example, as a result of strong working relations with the CWU and Prospect unions, the BT group has succeeded in avoiding the need for any compulsory redundancies in recent years.
Longer consultation periods also provide time for employers and unions to explore all alternatives to redundancies, including identifying new orders, efficiency savings, restructuring, and recruitment freezes. For example, union reps from a utilities company surveyed by the TUC reported that when consultation due to last 30 days was allowed to continue for longer, this enabled discussions of all the relevant issues, including the selection criteria for redundancies. In this instance, nine jobs were saved when union arguments were recognised by the employer.
The 90 days minimum consultation periods provide time for effective redeployment exercises, to ensure any selection processes are fair and for employers and unions to agree redundancy packages which assist workers in getting training and paying bills until they find new employment. It also provides time for union learning reps and government agencies to provide access to training, advice and job search support to those at risk of redundancy.
The TUC believes any reduction in the 90 days minimum consultation period will send a signal to employers that they need not prioritise exploring ways of saving jobs. This could lead to increased unemployment and more reliance on the welfare benefits, and would also have a detrimental impact on local economies and communities - particularly those areas of the UK where unemployment is already high and where there are limited job vacancies.
The TUC argues that there is now a case for strengthening collective redundancy consultation arrangements. For example, the recent experience of former Woolworths staff illustrates the unfair outcomes which can result from the 20 employee threshold for redundancy consultation.
After Woolworths went into administration, the insolvency practitioners failed to consult with USDAW, the recognised union. USDAW subsequently brought a successful application for awards, winning £67.8 million for 24,000 Woolworths' employees. However 3,000 employees failed to receive any compensation because the Employment Tribunal concluded they had been employed in separate shops which employed fewer than 20 employees.
The Woolworths case is not an isolated example either. Unions regularly tell the TUC that employers attempt to restructure businesses and organisations into smaller establishment units so as to avoid the duty to consult over redundancies.
“As a result of the recession and government spending cuts, unemployment is now running at more than 2.6 million and tens of thousands of jobs will continue to be lost in the public sector this year,” continued Barber. “Rather than cutting back on consultation rights, now is the time for ministers to strengthen collective redundancy arrangements and protect working people and employers.”
The TUC believes the government's current review of collective redundancy law provides an important opportunity to amend the law and to prevent a repetition of the recent Woolworths situation.
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