‘More Redundancies – Less Time’; the reduction in the period for collective consultation

Perhaps one of the most draconian of the 2013 changes to employment law is the reduction in the period for consultation, effective from 6th April 2013, when an employer proposes to make large-scale redundancies.  

As we have seen in the news in recent months, the downturn in the economy has hit even established businesses hard and we have read how the likes of Comet, HMV and Blockbuster have entered administration and have been forced to reduce their workforce.

As a firm we have also noticed an increase in the number of protective award claims - where employers fail in their duty to consult with their employee’s representatives, such as recognised Trade Unions, when mass redundancies are proposed - as businesses continue to struggle in the current economic climate.

Previously, under the Trade Union and Labour Relations (Consolidation) Act 1992, if an employer planned to make 100 or more redundancies within one organisation it had to consult the representatives of those affected employees for at least 90 days before the first dismissal took effect, providing there were not extenuating and unforeseen circumstances.

However, as of 6th April 2013, the 90 day consultation period has been cut to just 45 days, although where between 20 and 99 employees are earmarked for redundancy, the consultation period remains 30 days.

It was stated by the Employment Relations Minister, Jo Swinson, that the change in the law was because the previous 90 day period caused “unnecessary delays for restructuring and made it difficult for those affected to get jobs quickly”. It is therefore the government’s position that this change, along with all others planned for later in 2013, will create growth and flexibility by allowing businesses to easily respond to volatile and changing market conditions.

We however prefer the opposition view put forward by the Labour MP, John McDonnell, when he said; “the reduction means that the opportunity for consultation is hopeless. It will not happen and will be meaningless as there will not be the time for the employees to work with the employers to look at alternative plans for that company”.

This view, which we share, is supported by the example of Jaguar Land Rover who in 2009 announced that they were to make up to 1000 employees redundant, before £70 million was identified towards the end of the 90 day consultation period which ultimately prevented any job losses.

It is therefore doubted whether this change to the law does indeed “strike an appropriate balance between making sure employees are engaged in decisions about their future and allowing employers greater certainty and flexibility to take necessary steps to restructure[1)”...

[1] – Announcement by Jo Swinson, Liberal Democrat Employment Relations Minister, 6th April 2013

Chris Ridley – Solicitor

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