On April 6 new regulations came into force which reduce from 90 to 45 days the consultation period before the first dismissal takes effect, where an employer is proposing to dismiss 100 or more employees at one establishment within a period of 90 days or less. The new 45 day period applies to such proposals to dismiss made on or after 6th April 2013. Similarly, the 90 day period to notify the Secretary of State (the HR1 form) is reduced to 45 days. The regulations also exclude the normal expiry of fixed term contracts from collective redundancy consultation duties.(See our e-brief Collective redundancy consultation changes confirmed)
Accompanying the change, but fundamental to it, is new guidance from ACAS entitled “How to manage collective redundancies”. The guidance is not legally binding but aims to help employers understand their legal obligations and “sets out the principles and behaviours behind a good quality consultation to help employers manage collective redundancies more effectively”.
Specifically, the guidance covers the following areas:
- when consultation should start
- what is meant by an establishment?
- how many employees are involved?
- who to consult
- what information should be provided
- how the consultation should be conducted
- how long consultation should last
- when individual consultation should be carried out
- when dismissal takes effect
- what rights of redress exist, and
- conducting consultations in non-standard circumstances, including business transfers and insolvencies.
The challenge of finalising the content for this new guidance should not be underestimated, given the uncertain state of the law in some of the above areas. By way of example, there is tension over the meaning of “establishment” and whether this means, on one hand, a work location or, on the other, an entire business. The guidance gives the example of a logistics company with three distribution sites across a city. The warehouse staff are assigned to particular sites, which are run as distinct entities, and the guidance states that for them the site would be the establishment. However the drivers, although based at a particular site, are expected to work flexibly across the three sites and are managed as a single entity. For the drivers, the guidance says, the establishment is likely to be the three sites.
The guidance has much practical help of this nature and contains sample forms, timelines and case studies. Further, it does not restrict itself to legal principles, addressing issues such as dealing with people, including the survivors of a redundancy process.
Although ACAS faced a challenging task, the guidance it has produced will be a helpful port of call for employers facing the trials and tribulations of a collective redundancy situation.