Redundancy Consultation Period to be Halved

Redundancy Consultation Period to be Halved

richard_mcmunn_entrepreneurThe recent move by the Government to halve the 90 day redundancy consultation period to 45 days is set to take effect in April 2013. While the Government clearly believes that this would make Britain more competitive and improve efficiency, those who oppose feel that halving the time will only serve to make it easier for businesses and companies to fire people and leave those made redundant at an increased risk of financial hardship.

The coalition Government has been considering reforms to employment law for some time. The Prime Minister had commissioned conservative party donor and venture capitalist Adrian Beecroft to write a report on potential reforms. Parts of the report were condemned by the Liberal Democrats, and eventually the coalition decided to consult with businesses to learn about what reforms they wanted to see. This move is a result of that consultation.

The industry has welcomed this change, citing that the 90 day period was excessive and all the procedures are usually completed before the 90 day period is over. According to those who welcome the move, the 45 day period will allow companies and businesses already in trouble to restructure more quickly. Reducing the redundancy period to 45 days will also make Britain more competitive in the EU market.

However, these are tough economic times for everyone, and having less time to mitigate the impact of redundancy might mean an increased risk of financial hardship and difficulty. 90 days can be too short a time period, or too long a time period depending on which side you look at it from. But by and large, 90 days does not seem to be an excessive amount of time for people to make alternative arrangements.

Whether it is finding another job, or another career path, after being made redundant, these things do take time. Financial commitments such as mortgages and any other liabilities also need to be dealt with. Another important factor to consider would be the support systems which are in place for those affected by redundancy. Any support that is available to communities and individuals impacted by redundancies will also need to be organised within a much shorter time frame, which might also be a challenge.

The move has been described as a watering down of employee rights, by the Shadow Business Secretary Chuka Umunna. Ian Murray, the Shadow Employment Relations Minister stated that “David Cameron should be making it easier to hire, not easier to fire. We need a real plan for jobs and growth, not an attack on people’s rights at work”.

The aim of the Government is to boost UK businesses and make Britain more competitive, but this change will not guarantee it. While there are two sides to every story, simply slashing the redundancy consultation period by half may be a rash move and may have disastrous consequences for those affected  by redundancy. A much more temperate alternative might be to permit early closure if needed and appropriate, and to keep the 90 days period in place.