Fixed term contracts and redundancy consultation: changes from April 2013

Fixed term contracts and redundancy consultation: changes from April 2013

Published:

Author: Kevin McCavish

Draft legislation to implement the Government's previously announced intention to make changes to the consultation regime for collective redundancies has now been published.

The Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment) Order 2013 (the Order) is expected to come into force on 6 April 2013.

Changes to the consultation period

The Order reduces the current consultation period where there are 100 or more redundancies proposed from 90 to 45 days. It should be noted however that this is simply the minimum period - in practice, actual consultation could go on for much longer than this.

The Order also reduces from 90 to 45 days the minimum period of notice which must be given to the Secretary of State (normally on form HR1) before the first dismissals take effect.

The current 30 day consultation period which applies where there are between 20 and 99 redundancies proposed will remain unchanged.

Fixed-term contract changes

The Order also excludes fixed-term contracts which are terminating at the point it was agreed they would terminate from the collective consultation requirements. This means that where contracts are coming to their natural end they will not have to be included in the calculation to decide if collective consultation is required.

Employers need to be aware however that this exclusion does not apply where a fixed-term contact is being ended prematurely because of a redundancy situation. If this is the case then fixed-term employees will count towards the threshold for collective consultation.

No changes to unfair dismissal

The Order only makes changes in respect of collective consultation; it does not make any changes to the law relating to unfair dismissal. Employers must bear in mind therefore that, whatever the reason for dismissal, where the fixed-term employee has been employed for at least two years they must still be dismissed fairly i.e. for a potentially fair reason and in accordance with a fair procedure. Remember also that in some limited circumstances fixed-term employees will be able to bring a claim without any qualifying service e.g. where dismissal is pregnancy related.

Comment

The Order will apply where proposals to dismiss 20 or more, or 100 or more (as the case maybe) employees at one establishment "are made" on or after the 6 April 2013. The meaning of proposals being "made" is not defined and raises the prospect of satellite litigation where employers simply put off announcing redundancies in order to come within the new regime.

The change in the law will be welcome in sectors such as higher education which use fixed-term contracts extensively. However, employers may need to check any collective agreements with trade unions to ensure there is no freestanding obligation to consult about the termination of fixed-term contracts which will continue after the law changes in April.