Redundancy consultation period to be halved to 45 days

Unions have accused the government of making it easier to sack people after a minister announced that the period before large-scale redundancies can take place is to be cut from 90 to 45 days.

Jo Swinson, Liberal Democrat employment relations minister, also announced plans to exclude fixed-term contracts from collective redundancy agreements when they reach the end of their "natural life". Swinson said the changes were aimed at helping workers and businesses.

The TUC said the measures "will not save a single job". Reducing the consultation period gave unions less time to work with employers to find ways to save jobs. Removing redundancy rights from fixed-term contract staff would create more job and financial insecurity for temporary staff and reduce their chances of redeployment.

Currently, firms must consult with staff for a minimum of 30 days before making more than 20 staff redundant, or 90 days when 100 or more jobs are at risk. The Department for Business, Innovation & Skills said a consultation on the changes conducted last summer had resulted in a strong argument for shortening the 90-day period, and moving to 45 days would still allow full employee engagement including the statutory right to contribute to the process.

The changes form part of the government's commitment to review employment law to support business and concentrate on growth.

Swinson said: "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." The change is planned to be introduced from next April.

Brendan Barber, the TUC general secretary, said: "The last thing we need is for the government to make it easier to sack people. Unemployment has not gone as high as many feared because employers have worked with unions to save jobs, even if it has meant sharing round fewer hours and less work.

"The need to consult unions has made an important contribution to that, and also given staff, many of whom will have had years of loyal service, time to think through their options.

"These measures will not create a single extra job. The idea that an employer will change their mind about taking someone on because the statutory redundancy consultation period has been reduced from 90 to 45 days is close to absurd.

"Removing consultation rights from fixed-term contract staff will seriously increase job and financial insecurity for vulnerable groups of workers, and temporary staff will lose out on redeployment opportunities."

The University and College Union (UCU) said plans to exclude fixed-term contracts from collective redundancy agreements were "another damaging blow" for post-16 education, a sector with high rates of staff on fixed term contracts that has already been hit with funding cuts and threats of job losses.

The UCU general secretary, Sally Hunt, said the plans meant trade unions would no longer have the legal right to be consulted about widespread redundancies of staff who happen to be on fixed-term contracts – many with long years of service.

Hunt said: "Casualisation in our universities and colleges remains the unacceptable underbelly of post-16 education and these changes send a very worrying message to staff. Employers should maintain collective consultations whether or not they remain a legal requirement, as it is good for staff and institutions to engage in positive dialogue.

"Jobs for early careers staff in further and higher education are already notoriously insecure; making the situation even worse could result in many considering different career paths."

Business groups welcomed the plans as sending a "strong signal" that ministers were committed to creating a flexible labour market.

Tim Thomas – head of employment and skills at EEF, the manufacturers' organisation – said: "By reducing the consultation period from 90 to 45 days, the government has taken a further step to creating a modern, consultation system based on the quality, not the length of, the process.

"It now needs to complete the package by introducing simpler settlement agreements and protected conversations that provide a better base for discussing and managing change in the workplace."

Neil Carberry, the CBI director for employment and skills, said: "The priority for businesses is meaningful consultation. A shorter consultation period will reduce uncertainty for staff and allow businesses to focus on the future more quickly."