On 6 April 2013, changes to the collective redundancy regime came into effect. The key change applies to employers proposing to dismiss as redundant 100 or more employees at one establishment within
On 6 April 2013, changes to the collective redundancy regime came into effect. The key change applies to employers proposing to dismiss as redundant 100 or more employees at one establishment within a period of 90 days or less. Employers must now start collective consultation at least 45 days before the first of the dismissals takes effect. This period has been reduced from 90 days by the Government, in an effort to allow employers to restructure more quickly and save on administrative and wage costs.
ACAS has also issued new guidance on how to manage collective redundancies. The guidance aims to help employers understand their legal obligations and manage collective redundancies more effectively. It sets out a ten-point checklist for handling collective redundancies. This includes looking at when consultation starts; what is meant by an 'establishment'; who should be consulted and how long consultation should last.
The guidance also confirms that when counting the number of redundancies proposed, the employer must include any fixed-term contract if the employer proposes to terminate the contract early and proposes to do so on grounds of redundancy. It states that where an employer simply proposes to terminate a fixed-term contract on the date agreed in the contract, this does not need to be included in the number of proposed redundancies, even if this is within the same period of time as the proposed collective redundancies.
The guidance also considers what constitutes an 'establishment'. The definition of establishment is of significance where redundancies are proposed at different sites as it will determine whether the obligation to consult collectively applies to all sites (or whether, potentially, sites with fewer than 20 proposed redundancies can be excluded). The guidance sets out that in order to determine whether a workplace can be classed as an establishment the following questions should be asked: Is a workplace a distinct entity? Does it have a degree of permanence and stability? Does it have the ability to carry out the tasks it has been assigned? Does it have a workforce, technical means and an organisational structure that allows it to carry out its function?
It is worth noting that the definition of establishment may be considered by the Employment Appeal Tribunal in USDAW and others v WW Realisation 1 Limited (in Liquidation) and another (joined with the Ethel Austin appeal) in May 2013. We reported on the Employment Tribunal decision here and further updates will be provided on this blog.
The ACAS guidance also contains a useful summary of the basic principles in relation to collective and individual consultation, deals with consultation in insolvency and TUPE situations and provides a case study.
However, collective consultation is a complex area of law so it remains to be seen to what extent the guidance can remove uncertainty from particularly thorny issues, such as the definition of establishment.
ACAS has also issued new guidance on how to manage collective redundancies. The guidance aims to help employers understand their legal obligations and manage collective redundancies more effectively. It sets out a ten-point checklist for handling collective redundancies. This includes looking at when consultation starts; what is meant by an 'establishment'; who should be consulted and how long consultation should last.
The guidance also confirms that when counting the number of redundancies proposed, the employer must include any fixed-term contract if the employer proposes to terminate the contract early and proposes to do so on grounds of redundancy. It states that where an employer simply proposes to terminate a fixed-term contract on the date agreed in the contract, this does not need to be included in the number of proposed redundancies, even if this is within the same period of time as the proposed collective redundancies.
The guidance also considers what constitutes an 'establishment'. The definition of establishment is of significance where redundancies are proposed at different sites as it will determine whether the obligation to consult collectively applies to all sites (or whether, potentially, sites with fewer than 20 proposed redundancies can be excluded). The guidance sets out that in order to determine whether a workplace can be classed as an establishment the following questions should be asked: Is a workplace a distinct entity? Does it have a degree of permanence and stability? Does it have the ability to carry out the tasks it has been assigned? Does it have a workforce, technical means and an organisational structure that allows it to carry out its function?
It is worth noting that the definition of establishment may be considered by the Employment Appeal Tribunal in USDAW and others v WW Realisation 1 Limited (in Liquidation) and another (joined with the Ethel Austin appeal) in May 2013. We reported on the Employment Tribunal decision here and further updates will be provided on this blog.
The ACAS guidance also contains a useful summary of the basic principles in relation to collective and individual consultation, deals with consultation in insolvency and TUPE situations and provides a case study.
However, collective consultation is a complex area of law so it remains to be seen to what extent the guidance can remove uncertainty from particularly thorny issues, such as the definition of establishment.