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Employment: Collective redundancy consultation

Redundancy has become an all too familiar word. The recession and economic downturn has hit everyone hard and has forced many businesses to make difficult decisions to cut costs. Previously if a business wanted to make 100 people or more redundant in one establishment they would have to carry out a consultation with staff who may be affected over a period of a minimum of 90 day. Many businesses were forced to make employees redundant as a result of cash flow problems. A protected consultation period could prove difficult in these circumstances as often a business needs rapid results. In response to this, the Government put forward a proposal to reduce the consultation period. The Government launched a consultation on the proposal. It has now been decided that the period will be reduced to a minimum of 45 days. The Government states that this will allow businesses the flexibility they need to respond to changes in economic circumstances. Furthermore the plans are designed to avoid putting employees under unnecessary stress during a prolonged consultation period.

Many businesses responding to the Government consultation called for the period to be reduced to a 30 day minimum however this was rejected by the Government. The Government said that they recognised that ‘less responsible’ employers would treat the 30 day minimum as a maximum period. They also acknowledged that a longer period allows the employees affected more time to look for alternative employment, but stood by their decision to reduce the period to a minimum of 45 days, stating that the purpose of the consultation period was not solely to give to employees an opportunity to secure other work.

Key points:

  • Businesses must manage any larger scale redundancy situations very carefully as an error in procedure or reason can leave an employer vulnerable to claims from employees.
  • Ensure that you allow sufficient time to carry out the process – the minimum is currently a 90 day consultation period therefore you must ensure that 90 days is treated as a minimum!
  • We would always recommend that you take legal advice if you are facing the prospect of making any redundancy, individual or collective. Please contact us should you need any help.