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Collective consultation – recent changes

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Often employers feel that employment law is stacked against them, full of “employee friendly rights”.  However, the Government has now introduced a number of changes to employment law that are favourable to employers to try to redress the balance.  These changes centre around collective consultation for large-scale redundancy exercises.

An employer is obliged by law to collectively consult with recognised trade union representatives and/or nominated employee representatives, if they propose to dismiss 20 or more employees within a 90 day period for reason for redundancy.

There have been 3 important changes to collective consultation:

  • Reducing the collective consultation period for employers proposing to dismiss 100 or more employees for reason of redundancy.
  • Removing the expiry of fixed term contracts from consideration for collective redundancy purposes.
  • Introducing a new ACAS guide on collective redundancy to provide guidance and clarity on the changes.

Reducing the collective consultation period
Previously, employers proposing to dismiss 20 – 99 employees within a 90 day period must engage in a minimum period of 30 days consultation.  If they propose to dismiss 100 or more over the same period, then the period of collective consultation increased to 90 days.

From 06 April 2013, the minimum consultation period for employers who are proposing to dismiss 100 or more employees within a 90 day period for reason of redundancy, has reduced from 90 days to 45 days.  The consultation period where 20 – 99 employees  are proposed to be dismissed remains the same.

Halving the consultation period, should allow employers more freedom within the redundancy process and make their obligations less tying.
Removing the expiry of fixed term contracts
From the same date, the Government also confirmed that the expiry of fixed term contracts will no longer have to be included in the numbers for collective redundancy purposes.

Previously, if a fixed term contract came to an end within the 90 day period, an employer had to count this towards the numbers of employees being made “redundant” for collective consultation purposes.  This is no longer the case.

The expiry of fixed term contracts will only be considered as a part of the numbers for these purposes if those employees are being terminated early (i.e. before the fixed term should come to an end) due to the redundancy exercise.  This is another relaxation of the rules and should make things clearer and easier for employers going forward.
New ACAS Guide
In order to explain the changes in more detail, ACAS have published a new guide on how to deal with collective redundancies.

This guide includes a useful 10 point checklist for handling collective redundancies.  The guide uses the word “must” to indicate when something is a legal requirement and “should” to indicate what is recommended good practice.

Click here for the ACAS guide.

We have updated our own guide on managing redundancies to take these changes into account.  Existing FB Support clients can log in to see the guide and access the other useful resources.

The FB Support website is full of useful resources for employers who are considering entering into a redundancy exercise. Also, if you sign up to one of our hours packages you will get a dedicated solicitor to help you through the whole process.

Click here to visit the service section of our website which sets out the package options available for FB Support.

If you want any further information or advice on collective redundancy, or any other element of employment law please feel free to contact any of the employment team on 01332 226 149 for a confidential chat.

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Derby Head Office:
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Tel: 01332 340 211
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