Reduced redundancy consultation period welcomed by businesses

Friday 21 December 2012

Business

New measures designed to increase employer flexibility have been welcomed by the British Chambers of Commerce (BCC).

The government recently announced that the 90-day consultation period before large-scale redundancies can take place is to be cut to 45 days.

And according to Dr Adam Marshall, director of policy at the BCC, this is a positive move for UK plc.

"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," he stated.

"The new rules will encourage firms to focus on quality consultation with staff and enable timely but fair decisions."

Reducing uncertainty

Dr Marshall said this greater flexibility to change direction more swiftly reduces uncertainty for employees and customers and may help to prevent further job losses where the survival of the business could be at risk.

"Businesses invest hugely when recruiting and training staff so redundancy is always a last resort," he noted.

"However, sometimes tough decisions are necessary, such as when a major contract is lost."

In such cases, businesses need to know they can respond efficiently, and not have their hands tied by unnecessarily drawn-out processes, Dr Marshall added.

IoD welcomes the 45-day consultation

Alexander Ehmann, head of regulatory policy at the Institute of Directors, said the proposals are "good news" and "a welcome step in the direction".

He said that 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," Mr Ehmann stated.

But he said the important thing is that guidance is given, making it clear when a consultation is to begin and end.

"Removing those employees on expired fixed-term contracts from this legislation is welcome, as their original inclusion was a particularly egregious example of the unnecessary 'gold-plating' of European legislation," Mr Ehmann said.

"The deregulatory principle demonstrated here could usefully be applied to other strands of employment law."

Posted by Dan Smith