Changes to Collective Redundancy Consultation
12th April, 2013
The Government has now published the Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment) Order 2013, which makes changes to the rules relating to collective redundancy consultation with effect from 6 April 2013.
Where an employer is proposing to dismiss as redundant 100 or more employees at one establishment within a period of 90 days or less, the 90-day minimum consultation period necessary before the first dismissal takes effect has now been reduced to 45 days. However, where at least 20 but fewer than 100 employees are proposed to be made redundant, the consultation period remains at 30 days.
In addition, the minimum period of notice which must be given to the Secretary of State (i.e. when lodging a form HR1) before the first dismissal takes effect in cases where the employer is proposing to dismiss as redundant 100 or more employees within a period of 90 days or less has now been reduced from 90 to 45 days.
The legislation has also been amended to make it clear that employees who are subject to fixed-term contracts of employment which have reached their agreed termination point are excluded from the obligations for collective redundancy consultation. However, if an employer is proposing to dismiss an employee who is subject to a fixed-term contract as redundant and the dismissal will take effect before the date on which it was agreed that their contract of employment would expire, the collective consultation obligations will apply.
Failure to inform and consult correctly when proposing to dismiss as redundant 100 or more employees can result in ‘protective award’ claims which could be brought by all employees who were dismissed, or who you proposed to dismiss as redundant. Protective awards are punitive and calculated based on gross pay for each week of the protected period. It is important to note that the statutory maximum of a week’s pay does not apply in these circumstances and the maximum protective award remains at 90 days’ remuneration per employee.
It is therefore imperative that you follow best practice requirements when contemplating redundancies in order to minimise the risk of such claims being brought against you. For advice on carrying out redundancies, please contact Helen Watson on 01244 405565 or send an email to [email protected].