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Detail of outcome
The Department for Business, Innovation and Skills has reviewed the current rules on collective redundancy consultation as part of the wider review of employment law. In response to the call for evidence conducted in late 2011, the government proposed changes to the collective redundancy regime in a 12 week consultation which concluded on 19 September 2012. The consultation sought views on a package of changes which aim to encourage better quality consultation in large-scale redundancies. Respondents to the consultation felt that a strong case had been made for a combination of legislative change and new guidance in this area. In light of this, the government response sets out its decisions in respect of the rules on collective redundancy consultation:
The government will remove the 90-day minimum period and replace it with a 45-day minimum period for redundancies of 100 or more. We will, however, review the operation and impact of the shorter statutory period on the labour market once we have had time to see its full effect.
New non-statutory guidance
The government has asked the Advisory, Conciliation and Arbitration Service (Acas) to prepare new guidance on collective redundancy consultations. This will address the principles and behaviours behind a good quality consultation, with a particular focus on dealing effectively with the most contentious issues, such as providing guidance on ‘establishment’. As collective redundancies happen in a variety of circumstances, which can be unpredictable and change rapidly, the code will give guidelines but allow enough flexibility for parties to tailor the consultation process appropriately.
Fixed-term contracts (FTCs)
The government will legislate to exclude FTCs which have reached their agreed termination point from collective redundancy consultation obligations, in line with the exemption allowed for in the Fixed-term Workers Directive. However, a fixed-term contract will need to have a clear termination point in order for it to benefit from this exemption. Further, the exemption will not apply where the employer is considering early termination of the contract as a result of redundancy.
The changes to the law came into effect on 6 April 2013. We have updated government information for employers to reflect this: Redundancy consultations.
Accompanying Acas guidance for employers has also been published: How to manage collective redundancies