On 23 November last year, Vince Cable made a speech setting out the government’s intention to reform employment relations. Amongst the proposals was a plan to consider the implications of reducing collective redundancy consultation periods, which in its current form has been around since 1992. The move was welcomed by employer groups like the CBI, CIPD as a way of allowing employers to be more flexible when making redundancies, however the TUC has argued that a reduction will remove the pressure on employers to consider alternatives to redundancy and it fears increased job losses.
Where an employer is proposing large scale redundancies of 20 or more people in one workplace establishment, employers have an obligation to carry out a collective consultation exercise with the employees’ elected or trade union representatives. If there are 100 plus people at risk, consultation must last no less than 90 days before the first dismissal. There is, in effect, a moratorium on redundancy dismissals until this consultation has taken place, otherwise employers could face “protective awards” of up to 90 days actual pay per affected employee. Collective redundancy consultation does not dispense with the need to individually consult with potentially redundant staff members.
The government would like to consider reducing the 90 day consultation period down to 30 days, thus considerably reducing the time it would take employers for employers to collective consult before implementing proposed redundancies.
In the current economic climate, some employers need to make strategic business decisions quickly to adapt their business to changing (sometimes contracting) market conditions. 90 days is considered by many to be too long a period to impose a freeze on dismissals, where modern modes of communication can make it easier to get messages across and consult, virtually, with more meaningful but fewer meetings and with increased access to management information by email or via intranets. We no longer live in a world where information is delivered by post and meetings need to be scheduled so far in advance. A failure to react efficiently, say, to loss of a big public sector contract and restructure in the short term could lead to further or increased redundancies that might otherwise have been avoided. Reducing the consultation period to 30 days for potential redundancies of 100 or more could therefore allow employers to speed up the decision making process, whilst still ensuring that an effective consultation takes place at collective and individual level, making sure that views are canvassed from staff as a whole and individually.
In reality, consultations at group level should be able to be concluded well before the expiry of the 90 day period, because such a long period has a more detrimental effect on workplace morale and employee wellbeing than say a 4 week period.
A waste of time?
Collective consultation is never a waste of time and employees should never feel excluded or side-lined from involvement in decisions about the structure or size of a work force. However, 90 days is considered too long that it detracts from a collective consultation culture, which should be efficient and business like in seeking to explore alternatives efficiently and commercially.
The government is to hold a public consultation on the issue later this year, but with the level of support already shown by the CBI for the proposals, employers may soon find that the task of making difficult decisions is not so protracted.