18th December 2012

Counting Down the Days

The UK Government announced today that the 90-day collective consultation period is to be cut to 45 days from April 2013.

Currently when an employer intends to make at least 100 employees redundant at any one establishment, the redundancy consultation must begin at least 90 days before the first of the dismissals takes effect.  The UK Government has stated that this change from a 90-day period to a 45-day period is intended to “help employees and businesses.”

At first glance, it is difficult to understand how this change will assist employees.  Although a shorter period of consultation might reduce the level of uncertainty for at-risk employees during a redundancy exercise, the shorter period will more importantly result in there being less time for trade unions and employees to consult with employers and find alternatives to redundancy.

By comparison the benefit to employers is more obvious.  A shorter consultation period will allow for employers to shed loss-making areas of the business more quickly and hopefully improve the likelihood of existing employees retaining their employment.  This should result in a greater opportunity for businesses to recover from a large-scale redundancy exercise.

Perhaps however the unintentional effect of this legislative change will be noticed when the fairness of redundancy dismissals are challenged at employment tribunals in the future.  The proposed change to the collective consultation period will not affect an employee’s ability to challenge the fairness of a dismissal.  However when considering the fairness of a redundancy dismissal, a tribunal may seek to focus on the quality of any collective consultation, rather than the length of such a consultation.

This legislative change is likely to heighten the importance of employers entering into meaningful consultation with affected employees before redundancies take effect.  Employers would be well advised to take legal advice before commencing a redundancy exercise in an attempt to limit the risk of a future finding of unfair dismissal.

Simon Allison
Partner – Employment Law

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