Redundancy talks period to be cut from 90 to 45 days

 
Ford worker closing gates in Southampton In October Ford announced it was making 500 people redundant by closing its factory in Southampton

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The 90-day consultation period before large-scale redundancies can take place is to be cut to 45 days, under government plans.

Employment Relations Minister Jo Swinson said the move was aimed at helping workers and businesses.

Labour said the changes would not boost economic growth and the TUC said: "Making it easier to sack people is the last thing we need."

But many business groups welcomed the move.

The change, which would affect the whole of the UK, is planned to be introduced in April. It would affect redundancies of 100 or more workers.

'Strike a balance'

Ms Swinson said a consultation process had produced strong support for the changes and added: "The process is usually completed well within the existing 90-day minimum period, which can cause unnecessary delays for restructuring, and make it difficult for those affected to get new jobs quickly.

Start Quote

The last thing we need is for the government to make it easier to sack people...These measures will not create a single extra job.”

End Quote Brendan Barber TUC

"Our reforms will strike an appropriate balance between making sure employees are engaged in decisions about their future and allowing employers greater certainty and flexibility to take necessary steps to restructure."

Shadow business secretary Chuka Umunna described the announcement as a "watering down" of employee rights.

Mr Umunna tweeted: "Ministers think watering down people's rights at work is the big bazooka to get growth going and yet there is no evidence to support this."

Shadow employment relations minister Ian Murray said: "David Cameron should be making it easier to hire, not easier to fire. We need a real plan for jobs and growth, not an attack on people's rights at work."

Scotland's enterprise minister Fergus Ewing said the change "will make it more difficult to mobilise and plan the support that can minimise the devastating impact of large redundancies on communities".

He added that if employment law was the responsibility of the Scottish government, ministers would ensure a better balance between "the needs of employers, employees, local economies and communities".

Alexander Ehmann from the Institute of Directors and Sarah Veale from the TUC give two views on redundancy changes

A Welsh government spokesman said the 90 day consultation period is the "absolute minimum necessary" to ensure that "possible alternative solutions" to redundancy can be found.

The TUC's General Secretary Brendan Barber said: "The last thing we need is for the government to make it easier to sack people.

"These measures will not create a single extra job. The idea that an employer will change their mind about taking someone on because the statutory redundancy consultation period has been reduced from 90 to 45 days is close to absurd."

Unison's assistant general secretary, Bronwyn McKenna, said: "Any worker facing redundancy needs time to plan, to mitigate the impact on them and their family finances. Making arrangements to cover mortgages or rent, sort out bills, retrain and apply for new jobs all takes time and this cut will leave families facing financial hardship."

'Antagonism'

But Alexander Ehmann, of the Institute of Directors, said: "Companies facing problems have to be able to restructure swiftly, and a 45-day consultation period brings the UK closer to a number of EU competitors.

"We would have preferred a move to a 30-day consultation period - the same as for smaller-scale redundancies - which would have made the law less complex," he added.

Tim Thomas, head of employment and skills at the manufacturers' organisation EEF, said: "Today's announcement will send a strong signal to industry that the government is committed to creating the flexible labour market that it needs."

Dr Adam Marshall, director of policy at the British Chambers of Commerce, said: "In the 21st century requiring a business to spend a quarter of a year consulting on how to restructure is unnecessary, frustrating and potentially disastrous."

Sacked worker Adrian Beecroft, a venture capitalist and Conservative Party donor, submitted a report earlier this year on cutting red tape

Ms Swinson also announced plans to exclude fixed-term contracts from collective redundancy agreements when they reach the end of their "natural life".

Earlier this year the prime minister commissioned venture capitalist and Conservative Party donor Adrian Beecroft to write a report about how employment law could be reformed to cut red tape and boost UK businesses.

He reported in May but some of his recommendations were condemned by Business Secretary Vince Cable, a Liberal Democrat.

Later in the summer the coalition decided that, rather than introduce the recommendations in the Beecroft Report, they would consult with businesses about what changes they would like to see introduced and that consultation has led to Wednesday's announcement.

The announcement came on the last day of trading for electrical store chain Comet - which had employed more than 6,000 people - after it went into administration.

And cleaners and porters at Brighton and Sussex University Hospital NHS Trust are to vote about taking industrial action after their employer, Sodexo, was accused by the GMB union of "deliberately avoiding" its statutory obligation to hold a 90-day consultation over redundancies by announcing just under 100 job losses.

 

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  • rate this
    -17

    Comment number 395.

    Sensible move. The huge wealth that (even most of the poor in) society enjoys today is a result of economic efficiency that has been created through change. 90 days is ususally unnecessary and acts as an impediment to change.

  • rate this
    +3

    Comment number 389.

    Having served on a consultation board, I can tell you that 90 days can feel both too long and too short. A midway would be to retain the 90 days if needed but allow for early closure of consultation if appropriate.

  • rate this
    +15

    Comment number 305.

    Many employers offer 3 months' salary in lieu of consultation, in addition to redundancy pay. This works really well for employees and enables them to walk away financially secure without having to jump on the first job that comes along. What is really needed is new legislation that stipulates that leaving a role while at risk does not result in the loss of all redundancy benefits.

  • rate this
    -41

    Comment number 119.

    Frankly, this is a good move. The 90-day period was always too long, especially to those who wanted to take the redundancy payment and move on. Such things are always difficult and stressful but quicker is better and, in the long run, less painful.

  • rate this
    -52

    Comment number 86.

    This will be good news for employees. I have been involved in a number of group redundancies where there were employees who wanted to leave for another job but couldn't for fear of losing their redundancy pay. This is a huge problem because many employees take a pay cut in order to change direction in their career. Redundancy pay is critical finance supporting the need to move when opportune.

 

Comments 5 of 9

 

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