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Redundancy plans ‘good for firms and staff’: food manufacturers

By Gary Scattergood , 20-Dec-2012

Food manufacturers have welcomed government plans to halve the notice period before firms can make large scale redundancies as a “step in the right direction”.

The government's redundancy plans are ‘good for firms and staff’, say food manufacturers

The government's redundancy plans are ‘good for firms and staff’, say food manufacturers

The government claims reducing the consultation period from 90 days to 45 will help workers and businesses.

However, ministers rejected calls to move to a 30-day period, a time frame preferred by Food and Drink Federation (FDF) members.

Angela Coleshill, FDF employment, skills and corporate services director, told FoodManufcature.co.uk: “From speaking to our members, we know that businesses in our sector prefer the option of a minimum 30-day consultation period for large-scale redundancies. Nevertheless, the government’s announcement of a 45-day period is a move in the right direction.”

Unfair

She added that long periods of redundancy consultation were unfair on firms and their staff.

“Long, drawn-out redundancy consultation periods can have a negative effect on both employees and businesses, and we believe that, in most circumstances, a 30-day period is long enough for employers to undertake effective and good quality collective consultation on proposed redundancies with trade unions and/or employee representatives,” she added.

“However, we appreciate that longer periods may be needed for more complex redundancy consultation exercises.”

Employment relations minister Jo Swinson said a consultation on the changes had produced a strong argument for shortening the 90-day period, adding: “The process is usually completed well within the existing 90-day minimum period, which can cause unnecessary delays for restructuring, and make it difficult for those affected to get new jobs quickly.

"Our reforms will strike an appropriate balance between making sure employees are engaged in decisions about their future and allowing employers greater certainty and flexibility to take necessary steps to restructure.”

Statutory right

The replacement of the current 90-day period to 45 days – which has been condemned by unions ‒ will still allow full employee engagement and offer employee representatives a statutory right to contribute to the process, said the Business Department. The change is planned to be introduced from next April.

Plans were also announced to exclude fixed-term contracts from collective redundancy agreements when they reach the end of their “natural life”, a move one legal expert said would be welcomed by many food and drink firms.

Nieema Choudry, a partner at Eversheds, said: “Before this change, when more than 20 people were affected by a fixed term contract coming to an end, it was classed a dismissal and was caught by the collective regulations. This will no longer be the case and this will be a welcome change for many food businesses.”

However, she added that there were still some outstanding issues that need to be clarified by the government.

“One issue that has not been made clear is the effect these changes will have on the protective award – the amount an employer is ordered by a tribunal to pay an employee if it fails to adequately consult. At the moment, this is set at 90 days’ pay, and I have not seen anything saying if this will now reduce to 45 days’ pay in line with the consultation period.”