Hello and a warm welcome to the first of our employment videos for 2013. There will be lots of interesting developments coming up in 2013 and just to show I am not imagining this, this week saw the European Court of Human Rights give its decision in the case of Ewieda and others involving religious discrimination - more about that in future episodes. We have been running our employment update videos for over a year and a half now and we would welcome any feedback - good, bad or indifferent - as to how we can improve this value added service. You can now access the video’s as podcasts either through itunes or the medium you use to view or listen to podcasts. Other things to watch out for are:
- our HR forum on Linked In which is now live - please go on and contribute; and
- our breakfast seminar on 13 March (please save the date) and we will send you more details.
Finally, please also take part in our quiz at the end of the video for the chance to win a bottle of champagne. The first person to email me with the correct answer will have a bottle of champagne on the way to them.
Today’s video is on the topic of collective consultation for redundancy dismissals and the Government’s proposed changes to the employer’s obligations.
In November 2011, the Government published a Call for Evidence on collective redundancy consultation to explore the consequences of reducing the 90-day consultation period for large-scale redundancies. This was followed by a consultation issued in June 2012 which included the proposal to reduce the minimum 90-day consultation period for 100 or more redundancies to either 45 or 30 days. On 18 December last year the Government announced the changes which are to come into force on 6 April of this year.
Current employer obligations
By way of a reminder, employers are currently under an obligation to consult with appropriate employee representatives when proposing to make redundant at least 20 employees at one establishment within a period of 90 days or less.
The consultation must begin “in good time” and in any event where 100 or more redundancies are proposed it must begin at least 90 days before the first of those dismissals takes effect. The minimum consultation period where at least 20, but no more than 99 redundancies are proposed, is 30 days before the first dismissal takes effect.
Government response to the consultation
The Government’s response to the consultation was published in December and the Government has decided to reform the 90 day period, review the position regarding fixed term contracts in a collective consultation context and introduce new statutory guidance.
Reduction in consultation period
Of those who responded to the Government’s consultation issued in June last year, 52 per cent favoured a reduction to 30 days, 19 per cent supported 45 days and 22 per cent wanted to retain the 90 day period.
The Government has however decided that with effect from 6 April, the minimum consultation period where 100 or more redundancies are proposed will be reduced from 90 to 45 days. The minimum consultation period for between 20 and 100 redundancies will remain at 30 days. This is sensible in my view as it is not clear how much value there is after 45 days in a consultation process.
The Government rejected the call, which came mainly from employers, for the standard 30 day period believing that less responsible employers would treat the reduced period as a maximum instead of a minimum. Employers also argued that meaningful consultation usually lasts for about 30 days, and so the Government decided that the 45 day period would be a sensible compromise which would allow for greater flexibility for business, but would provide protection to employees. Hoorah the government has made a sensible change to UK employment law.
However, as a hint of caution, the Government has indicated that it will review the operation and the impact of the shorter statutory period on the labour market once the full effect of it has been assessed.
Collective consultation and the expiry of fixed term contracts
Another area of change involves the confusion as to whether fixed term contracts which have come to an end trigger the collective redundancy consultation requirements. Particular concern was raised by employers in the Higher Education sector who felt that current legislation required them to engage in near constant consultation over the end of fixed term contracts.
The Government has determined that it will legislate to exclude the expiry of fixed term contracts which have reached the end of their term from the collective redundancy obligations. However, a fixed term contract will need to have a clear termination point to benefit from this exemption. Obviously this exemption won’t apply where fixed term contracts are terminated early by reason of redundancy. Again this solution seems sensible.
ACAS is to prepare non-statutory guidance on collective redundancy consultation which will deal with “the most contentious issues” such as the meaning of “establishment”. The litigation over this topic seems perennial and has recently been addressed in the Woolworths case where it was held that each Woolworths store was a separate establishment. It will also address the principles and behaviour behind a good quality consultation and so give guidance on such matters as: when consultation should start; who should be consulted; what should be discussed; how the consultation should be conducted; and when consultation should be considered to be complete?
The Government intends that the amended legislation and the ACAS guidance will be in place for the commencement date of April 2013.
This video is intended to give you a summary of the recent developments regarding collective consultation on redundancy and we will of course keep you informed of future developments. However, if you have any questions on any aspects of today’s topic, then please don’t hesitate to contact to me at email@example.com. And finally our monthly quiz question and a reminder that the first person to email me with the correct answer will be the proud recipient of a bottle of bubbly.
We mentioned the Woolworth litigation earlier - the question is “what year was the first store opened by F.W. Woolworth?”
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