In the last few weeks, it has been announced that changes to consultation periods in a collective redundancy will be effective from 6 April 2013.
In our previous update (9 August 2012) we reported that the Department of Business, Innovation and Skills (BIS) was consulting on changing consultation periods in a collective redundancy. The agreed changes have now been confirmed, and are effective from 6 April 2013.
Collective consultation is required where an employer proposes to dismiss 20 or more employees by reason of redundancy from the same establishment within a period of 90 days or less.
As from 6 April 2013, the consultation period that must be complied with before the first dismissal can take effect in a collective redundancy situation involving 100 employees or more, has been halved from 90 days to 45 days. However, the 90 day consultation period will continue to apply to any collective redundancy consultations involving 100 or more employees that were initiated prior to 6 April 2013.
There been no change to the current 30 day consultation period that must be complied with in a collective redundancy situation involving 20-99 redundancies.
A further change effective from 6 April is that employees engaged on fixed term-contracts which reach their ‘agreed termination point’ will be excluded from collective consultation. Previously, the expiry and non-renewal of a fixed-term contract was included for the purposes of collective consultation meaning that if an employer planned to reduce its headcount by 19, but a fixed-term contract was also due to expire in the same 90-day period as these dismissals, the duty to collectively consult was triggered. This is no longer the case.
The upper limit for a protective award, which is the award that an employment tribunal may order an employer to pay for failing to adequately inform and consult its affected employees in line with its collective consultation obligations, however, will not change and will remain at 90 days' pay.
ACAS has produced guidance on these issues which is aimed at helping employers understand their legal obligations. The guidance sets out principles and behaviours to help employers manage collective redundancies more effectively. The guidance can be found here.