Relaxation of collective redundancy consultation requirements

Changes to the requirements for collective redundancy consultation come into effect today as part of the government’s agenda to increase labour market flexibility and lighten the regulatory burden on employers.

| Filed under redundancy

Employers who are intending to dismiss as redundant 20 or more employees at one establishment over a 90 day period are required to consult with recognised trade unions or elected employee representatives "with a view to reaching agreement" on ways to reduce the number of redundancies or avoid them altogether, and on mitigation of the consequences of redundancy. Employers must also serve formal notice of intended collective redundancies on the Secretary of State.

Where the number of redundancies anticipated is between 20 and 99 the minimum period of consultation and notice to the Secretary of State remains unchanged at 30 days.

However where the number of redundancies anticipated is 100 or more the previous minimum consultation period of 90 days is halved to 45 days, with a similar reduction in the minimum notice that must be given to the Secretary of State. There is however no change in the maximum "protective award" that can be made by employment tribunals in respect of failure to properly consult, which remains 90 days pay (uncapped) per affected employee.

For the purposes of establishing whether or not the obligation to carry out collective consultation is triggered fixed term employees whose employment terminates at the end of the full agreed fixed term are expressly excluded from the total number of redundancy dismissals over a 90 day period. If however a fixed term employee’s employment ends earlier than the end of the full fixed term by reason of redundancy then these dismissals will count towards the overall number of redundancy dismissals during the relevant 90 day period.

The government has promised a new ACAS guide on collective redundancies which will also aim to assist employers with some of the more controversial and difficult to apply legal tests, such as the definition of a single establishment.