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Redundancy notice cut by half

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Government announces that firms will only have to give employees 45 days notice of redundancy as opposed to 90 days.

Following the Government announcement that redundancy notice is to be reduced by half, Daniel Peyton, from international law firm, McGuireWoods said: “This announcement will affect employers making 100 or more employees redundant. Many employers will welcome the fact that the consultation period is to be reduced from 90 days to 45, feeling that the 90 day period is far too long and delays the implementation of important business decisions that have a bearing on the future of the organisation. Employees, too, will benefit from the news as they are frequently placed in an unnecessary and artificially delayed limbo which adds to their anxiety rather than genuinely protecting their rights.

Mr Peyton added: “It is entirely possible to conduct an effective and meaningful redundancy consultation in much less than 90 days. The over-arching problem with the approach taken to redundancy consultation in the UK is the emphasis on an arbitrary time limit, rather than the substance of the actual consultation. The focus should shift from the length of the consultation period to ensuring that employees are being given the information they need, when they need it in order to make appropriate representations, plans and take decisions about their future.”

Chris Fisher, Employment partner at global law firm Mayer Brown commented: “The Minister’s announcement will be welcomed by employers (though not by trade unions). The current 90 day period is not in fact a minimum consultation period – it is a “waiting period” ahead of which the employer cannot make the first redundancy dismissal – but it has however become a benchmark for how long an employer is expected to consult on a collective basis.

Most employers conclude their collective consultation well within a 90 day period and often the employees themselves are keen to move on to one to one redundancy discussions much sooner in the process therefore this move should help remove some of the red tape and make it easier for businesses and employees in what is often a fraught and challenging time.”

Seán Lavin, head of employment law at leading firm Macfarlanes, comments: “The change will be helpful to businesses, but there are two important caveats. The maximum penalty for ineffective consultation has not been changed, and will remain at 90 days' pay per employee. Also, there remains huge uncertainty about when exactly in the decision-making process the obligation to consult actually arises. The ECJ has recently sidestepped this issue and now the Government also may have missed a trick in not clarifying this fundamental question.”

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