Changes to consultation obligations on redundancies and business transfers

Simon Jeffreys explains how the new consultation obligations are more complex and impose increased penalties for failure to comply.

The Government has amended the consultation obligations on collective redundancies and transfers of undertakings. The amendments are contained in the Collective Redundancies and Transfers of Undertakings (Protection of Employment) (Amendment) Regulations 1999. The changes will apply in relation to redundancy dismissals taking effect on or after 1st November 1999 and to transfers of undertakings completed on or after the same date.

In relation to redundancies, the new law will require that representatives of employees who may be affected by the dismissals or by measures taken in connection with the dismissals must be consulted as well as representatives of employees who are facing actual redundancy dismissal.

For both redundancies and transfers of undertakings, the new law provides that employers must consult representatives of recognised trade unions where they exist. The option of bypassing recognised trade unions in order to talk directly with employee-elected representatives is therefore ended. The new Regulations also state specific requirements for the elections of employee representatives. If employees fail to elect representatives after being invited to do so, the employer must then give the employees concerned the information he would have had to give to their representatives.

Changes have also been made to protective awards. The maximum protective award of 30 days’ pay in the case where between 20 and 99 redundancies are made has been removed. There is now a single maximum award of 90 days’ pay across the board. However, the 30 day minimum consultation period for between 20 and 99 redundancies has not been changed.

The maximum compensation which can be awarded in the event of failure to inform and consult on transfers of undertakings has been increased from 4 weeks’ pay to 13 weeks’ pay.

The Regulations also extend the right to time off for training to elected employee representatives. The right not to be dismissed or suffer detriment is extended to employees who participate in an election of employee representatives.

The DTI have promised to publish detailed guidance on these new Regulations in the near future.

We still expect a wholesale revision of the Transfer of Undertakings (Protection of Employment) Regulations in the near future. A consultation exercise on this was completed some time ago and the Government has to amend the existing TUPE Regulations in any event to comply with the amended EU Directive.