The minimum period that employers must wait before making large-scale redundancies will be halved to 45 days from April 2013, the Government has announced this week.
The Government will remove the existing 90-day minimum consultation period, which applies where an employer is proposing to make a 100 or more staff redundant. This will be replaced with a 45-day minimum period.
The consultation period refers to the period where companies must consult, through appointed representatives or unions, before making staff redundant.
The current 30 day consultation period where between 20 and 99 redundancies are proposed will not be changed.
Business groups welcomed the decision saying it will allow companies to restructure more swiftly and save administrative and wage costs at a time when employers may need to act with urgency to sustain a business.
Adam Marshall, director of policy at the British Chambers of Commerce, said that it would reduce the impact of a costly, frustrating legal process. “This greater flexibility to change direction more swiftly reduces uncertainty for employees and customers and may help to prevent further job losses where the survival of the business could be at risk,”
Many businesses in fact argued in favour of shortening the minimum consultation period. Alexander Ehmann, of the Institute of Directors, said: “"We would have preferred a move to a 30-day consultation period, the same as for smaller-scale redundancies, which would have made the law less complex".
However most trade unions will see this as a reduction in employees’ rights and in effect losing 45 days pay.
Unison`s assistant general secretary, Bronwyn McKenna, said: "Any worker facing redundancy needs time to plan, to mitigate the impact on them and their family finances. Making arrangements to cover mortgages or rent, sort out bills, re-train and apply for new jobs all takes time and this cut will leave families facing financial hardship."
The TUC`s General Secretary Brendan Barber said: "The last thing we need is for the government to make it easier to sack people”.
Other changes the government have announced include:
Fixed term contracts
Under the new rules, companies will no longer have to consult with large groups of employees on fixed-term contracts if they decide to release them when their terms come to an end.
This change will be welcomed by employers in sectors such as higher education and IT, where fixed term contracts and their expiry have cause particular problems. The current rules mean that employers with high numbers of fixed term contract staff can be involved in rolling collective consultations, and often the consultation is meaningless as the options for extending the fixed term contract are limited. This step is intended to alleviate those problems.
The Government has also confirmed that ACAS will produce a non-statutory guidance to address the key contentious issues during consultation, with the aim of improving consultation.
The above changes are expected to take effect from 6 April 2013.