Employment: Large scale redundancies consultation period to drop from 90 to 45 days - December 2012

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The Government has just announced that the minimum consultation period required in large scale redundancy exercises (100+ employees) will go down from 90 to 45 days.  This change will take effect from 6 April 2013.

In detail

Currently, where an employer is proposing to make redundant 20 or more employees at one establishment within a period of 90 days or less, the employer is required to consult with appropriate representatives of affected employees.  Consultation must be started in good time and, where the number of proposed dismissals is 100 or more, employers must wait at least 90 days before making the first dismissals.

The Government has now announced that from 6 April 2013:

  • this 90 day period will go down to 45 days.  The Government was contemplating reducing the period to 30 days, to mirror the minimum consultation period required where there are proposals to make 20-99 employees redundant, but it has decided against doing this;
  • employees on fixed-term contracts that naturally expire at the end of the fixed term will be excluded from the collective consultation obligations – at present there is some confusion about whether fixed-term employees can be ignored for collective redundancy purposes;
  • ACAS will prepare new non-statutory guidance on collective redundancy consultation to help support employers and employees alike.  The guidance will focus on how to deal effectively with key collective consultation issues.

Practical points for employers

The current 90 day consultation period regime is seen by many businesses as overly restrictive; in reality, consultation is often concluded some time before the expiry of the 90 day period.  The reduction to a 45 day consultation period is therefore a welcome development for employers, giving them more flexibility when carrying out large scale restructuring plans.

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