The government has published details of its proposals to change the rules on collective redundancy consultation. The changes will have significant implications for employers implementing collective redundancy programmes.

As part of its wider review of employment law, the government has recently published its response to the consultation on its proposed reforms to the collective consultation rules. The key changes to the current rules are:

  • The current 90 day minimum consultation period which applies where 100 or more employees are to be made redundant from one establishment, (within a period of 90 days or less), will be reduced to 45 days.

Calls largely by employers for this period to be reduced to 30 days, such that only 1 minimum  period would have applied once the number of potential redundancies reached 20, were rejected by the government. In the response document, the governments states that it recognised the level of concern expressed by some respondents to the consultation that "less responsible" employers will treat the time period as a maximum period not a minimum. The government also states that a reduction to 30 days would have been to "send a signal" that it was placing less weight on the importance of consultation .

  • ACAS will be asked to draw up non-statutory guidance on how collective redundancy consultation exercises should be conducted. The guidance is likely to cover  issues such as:
    • when consultation should start;
    • who the consultation should cover;
    • who should be consulted;
    • what should be discussed;
    • how the consultation should be conducted; and
    • when consultation can be considered to be completed.
  • Importantly, the guidance will also include the often difficult practical issue of what constitutes an "establishment" for collective consultation purposes.

Rejecting the idea that there should be a statutory definition of "establishment", (on the basis largely that European case law would make this too difficult to do), instead, the government indicates that the guidance will include a list of factors which it believes will be useful in helping employers and employee representatives reach an informed decision. The factors are likely to include:

  • geographical location;
  • management structure;
  • management and financial autonomy;
  • cohesion of the workforce;
  • nature of the work undertaken or type of service provided;
  • contractual relationship between employer and employee; and
  • level within the company at which the decision to dismiss is taken.
  • Fixed term contracts will be excluded from the collective consultation rules. The exclusion will only apply however where the contract has a clear termination point and has reached the end of its "natural life". An employer who, for example, considers early termination of the contract by reason of redundancy, would not be able to exclude the fixed term contract when calculating whether the number of employees had reached the threshold for collective consultation purposes.

The government has said that it intends to implement the amended legislation and accompanying ACAS guidance with effect from 6 April 2013.

Please click HERE for a link to the government's response document.