Redundancy rule change announced

The government has announced that large scale redundancies will next year be able to take place with just 45 days of consultation instead of 90.

The plans revealed by employment relations minister Jo Swinson, will be in place by April 6, 2013, and are intended to make it easier for businesses to restructure and implement redundancy programmes.

Union leaders have criticised the move claiming it will simply make it easier for businesses to sack people.

Oliver McCann, partner in the employment team at Napthens solicitors, warned that the move did not mean businesses should see the change in regulation as a means of cutting corners or rushing through consultation, and said proper consultation should always be carried out.

The rules will only affect restructures involving 100 or more redundancies.

He said: “Often a minimum 90 day consultation period can be very costly for a business, at a time when that business could well be in financial difficulty and needing to implement cost saving initiatives and a quick restructuring programme.

“More often than not such consultations are completed before 90 days anyway so it is sensible that businesses be allowed, once consultation is complete, to implement the redundancies.

“However, there is the fear from employee relation groups that restructures could be rushed through without the chance to consider fully alternatives to avoid redundancies or reduce the number or mitigate the consequences of redundancies.

“There is nothing preventing an employer adopting a longer consultation period where appropriate, and businesses must remember there is a legal requirement to engage in proper consultation – otherwise they can face a hefty fine. Indeed, some businesses may be contractually required under a collective agreement to stick with a 90 day consultation period. “Any business which may be affected by the changing rules should contact their legal advisers for guidance.”