UK: Government mulls new collective redundancy rules

The UK government is contemplating significant amendments to the collective redundancy laws, impacting engagement with employee representative and the consultation process for redundancies across multiple sites.

What changes: The UK government is considering making significant changes to the law on collective redundancies. As it stands, employers have to consult employees’ representatives if they are “contemplating” making more than 20 employees in an “establishment” redundant within a 90-day period. “Establishment” means a site or individual workplace. So, for example, if an employer with 5 “establishments” made 19 workers in each establishment redundant they would not have to consult with representatives.

What it may do: The government is looking at doing away with the distinction between “establishment” and “undertaking” so that it would be the overall number to be made redundant that would count, and not how many in individual workplaces. Other changes under consideration include:

• increase the protective award to individual employees from 90 days to 180 days or even abolish the cap altogether to deter employers from trying to “buy off” potential employment claims about the lack of collective consultation. The award payment is made to individual employees where it is found that the employer has failed to properly inform and consult over the proposed redundancies; and
• allow employees claiming a protective award to ask for “interim relief” (essentially enabling them to remain employed or at least paid until a tribunal hearing).

On top of this, the government has said that it plans to consult next year on extending the 45 day collective consultation period to 90 days if an employer is proposing 100 or more redundancies. 

ADDITIONAL INFORMATION:

For a more detailed comment on the proposed changes, see this analysis from Lewis Silkin LLP