The Government has confirmed that it intends to reduce the minimum collective redundancy consultation period from 90 to 45 days where 100 or more redundancies are proposed, from next April.
Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 imposes an obligation on employers to consult employee representatives about proposed redundancies where 20 or more redundancies are proposed at one establishment.
There are two minimum periods for such consultation process: at least 90 days before the dismissals take effect where the proposals are to dismiss 100 or more employees and 30 days before where the proposals are to dismiss 20 to 99 employees. These are just minimum periods and consultation may take longer than this.
The consultation must be undertaken with a view to reaching agreement with the employee representatives and must include consultation about:
- avoiding the dismissals
- reducing the numbers of employees to be dismissed
- mitigating the consequences of the dismissal.
Earlier this year the Government consulted on various reforms to the collective redundancy regime. One proposal was to reduce the current 90 day minimum consultation period. The Government set out two options in the consultation paper; reduce the period to 45 days or 30 days. It has now confirmed that, despite significant support for the lower figure from employers, it has decided to go with 45 days. In part this was due to the importance of ensuring that local government organisations have sufficient time to respond to potential job losses.
The current 30 day consultation period for less than 100 dismissals will not be changed.
The Government has asked ACAS to prepare new non-statutory guidance on difficult issues which can arise in collective redundancy situations such as the meaning of "establishment".
Fixed-term contacts to be excluded
The Government has also confirmed that fixed-term contracts which have come to a natural end will be excluded from the collective redundancy regime. However, where such a contract is being terminated early because of a redundancy situation the exemption will not apply. This change follows the Employment Appeal Tribunal decision in Stirling v University College Union earlier this year.
It is expected that the amended legislation and the new ACAS guidance will be in place from 6 April 2013.