Tuesday, 24 January 2012

DAC Beachcroft welcomes any reduction in consultation period

While most organisations report that the prospect of having to conduct collective consultation does not mean they would put off large scale restructures / redundancies, the majority state that a shortening of the 90-day consultation period would be beneficial to UK business and organisations, according to leading international law firm, DAC Beachcroft LLP. It is likely however that there will be many who believe that the 90 day limit is essential for useful consultation.

DAC Beachcroft LLP will be responding to the latest Government call for views on the rules governing large scale redundancy consultations and the effectiveness of the 2006 changes to the TUPE Regulations. In a move designed to validate its response the firm has canvassed the opinion of approximately 2800 of its client contacts on effects ‘at the sharp end’ in a recent survey.

The responses received to date indicate that:

· A shortening of the 90-day consultation period for 100 or more redundancies would be beneficial to UK businesses and organisations.

· The current 90-day period gives rise to consultation fatigue, additional costs, uncertainty for employees and unprofitable delays.

· A period of between 30 to 45 days would be more appropriate/workable (80 per cent).

· More clarity is required on the formal definition of an ‘establishment’ for the purposes of collective redundancy consultation (respondents were divided as to whether this referred to ‘company’, ‘location’, ‘role’ or a combination of these and other criteria).

· On balance the 2006 changes to TUPE made the question of whether TUPE applies clearer, however, a specific time period for TUPE consultation would be welcomed rather than the current requirement to consult for “long enough” prior to the transfer, and the current time limit to submit “employee liability information” of 14 days prior to transfer is considered to be far too short.

· There is uncertainty at the moment as to whether employers can effectively start the collective redundancy consultation process in advance of any TUPE transfer. The majority of respondents (82%) would like it to be clear that they could do this without running any legal risk.

Overall, it appears that the 2006 TUPE changes, while welcome, need further clarification and simplification to reflect changes in the trading environment and contemporary working practices.

Commenting on the survey findings, Chris Syder, Partner said: “The Government’s two calls for evidence gave the firm a clear opportunity to represent the views of our clients and those who are affected by having to implement these legal requirements at the sharp end. There is a clear message to Government that UK business is finding the collective redundancy process cumbersome and confusing in practice.

“We would call upon the Government to listen carefully to these employer views and consider them when formulating future revisions to the existing regulations. 80% of those responding to our survey feel that the 90 day consultation requirement should be reduced to between 30 and 45 days. In the current economic climate, every effort should be made to help businesses in their attempts to adapt commercially to challenging market conditions. Employers clearly desire less rigid consultation period requirements”

The Department for Business Innovation & Skills published a call for evidence on the effectiveness of collective redundancy consultation rules [insert link] and separately the TUPE Regulations 2006 http://tinyurl.com/72rx4sg at the end of November 2011. The deadline for responses is 31 January 2012.