Changes to redundancy rules

The Government has recently announced plans to make changes to collective redundancy rules.

Under the proposed changes, the Government intends to:

• reduce the current 90 day minimum period, before very large scale redundancies can take place, to 45 days,
• legislate to make clear that fixed term contracts which have reached the end of their natural life are excluded from obligations for collective redundancies consultation, and
• introduce new non-statutory Acas guidance to address a number of key issues affecting collective redundancies consultation.

The announcement follows a consultation launched in June and is in response to calls for improvements to the way collective redundancies rules operate and for the processes involved to be made easier to understand. It also forms part of the Government’s commitment to review employment law to support business and concentrate on growth.

The replacement of the current 90 day period to 45 days will still allow full employee engagement and offer employee representatives a statutory right to contribute to the process. The new 45 day period will be a minimum period, and businesses may consult for longer where appropriate.

The changes will be made through secondary legislation. Draft regulations will be laid in the New Year and the changes are expected to be made by 6th April 2013.