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Cutting redundancy consultation risks increased unemployment
Reducing consultation rights during collective redundancy exercises could cost jobs, damage workforce morale and increase unemployment, according to the TUC.
Currently, where employers are proposing to make between 20 and 99 employees redundant, they must allow for at least 30 days consultation with unions or workplace representatives before any job cuts can take effect. Where 100 or more jobs are at risk the consultation period must last for at least 90 days.
The government is considering whether the 90-day consultation period should be reduced to make it easier, quicker and cheaper for employers to lay off staff. The TUC argues that cutting back these consultation rights would be detrimental for employers, employees and the wider economy.
Genuine consultation and effective negotiations between unions and employers can deliver genuine benefits, says the TUC, by lowering job losses, avoiding compulsory redundancies, and assisting employers to retain skilled staff. The process helps to ensure restructuring exercises are transparent and fair.
The TUC argues that there is now a case for strengthening collective redundancy consultation arrangements. For example, the recent experience of former Woolworths staff illustrates the unfair outcomes which can result from the 20 employee threshold for redundancy consultation.
After Woolworths went into administration, the insolvency practitioners failed to consult with USDAW, the recognised union. USDAW subsequently brought a successful application for awards, winning £67.8 million for 24,000 Woolworths' employees. However 3,000 employees failed to receive any compensation because the Employment Tribunal concluded they had been employed in separate shops which employed fewer than 20 employees.
The TUC believes the government's current review of collective redundancy law provides an important opportunity to amend the law and to prevent a repetition of the recent Woolworths situation.
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