News story

Collective redundancy rules to be changed

Employment Relations Minister Norman Lamb has published proposals to reform rules for consulting staff about large scale redundancies.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

21 Jun 2012

The new measures propose a more flexible regime and better consultation with staff. They seek to help companies respond to changing economic conditions. They also improve communication between managers and their staff to reduce uncertainty during the collective redundancy process.

Consultation on collective redundancies

The government has published a consultation on collective redundancies (PDF, 298 Kb) . This outlines the proposed measures and seeks views on a number of proposals by 19 September 2012. The proposals include:

  • Introducing a new, non-statutory, Code of Practice to give clearer information on how to conduct good quality consultations
  • Reducing the 90-day minimum consultation period for large scale redundancies (over 100 staff) to 45 or 30 days
  • Improving the guidance for employers and employees on the support on offer from government

The changes will mean that employers can restructure more effectively whilst ensuring that employees have access to good quality consultations. This should lead to better decision-making and limit the uncertainty and stress of the redundancy process.

Employment Relations Minister Norman Lamb, said:

“It is never easy for employers or employees when redundancy is a possibility, but it’s clear that the current arrangements are not working in the best interests of either staff or managers.

“Our reforms are about improving the quality of consultations - this really is a case of quality over quantity. The call for evidence showed that the current arrangements are not fit for purpose for the modern labour market and I would encourage people with an interest to get involved in the consultation. At present fear and uncertainty can hang over a workforce for three months, sometimes resulting in some of the best employees choosing to leave, even if they would not have ultimately been made redundant.”

There are some elements that government proposes to leave unchanged, including the Protective Award. This Award currently stands at a maximum of 90 days’ pay for each employee affected by a failure to consult and is paid by the employer.

Published 21 June 2012