As part of the Government’s plan to 'Make Work Pay', a consultation 'Making Work Pay: collective redundancy and fire and rehire' has been released. This seeks views on strengthening remedies against abuse of rules on collective redundancy and fire and rehire.
Consultation
Collective redundancy
Collective redundancy obligations apply where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a 90-day period or less.
- Employers have a statutory duty to consult the affected employees’ representatives about proposed redundancies, within a prescribed timetable.
- Where employers do not comply with these obligations, the primary means of enforcing rights under the collective redundancy framework is to make a claim to an Employment Tribunal (ET).
- The ET may make a protective award of up to 90 days’ pay to each affected employee.
The Government is seeking views on the proposal to increase the maximum period of the protective award that an ET can award.
Two options are being considered:
- Increase the protective award that an ET can award from 90 to 180 days.
- Remove the cap on the protective award entirely, leaving it to the discretion of the ET to decide the penalty of the employer.
Views are sought on which option would best achieve the government’s objective of ensuring employers fulfil their collective consultation obligations in a proportionate way, delivering the benefits that those consultations are designed to achieve for both the employer and employees.
The Government is also seeking views on whether interim relief should be available to employees who bring claims for the protective award.
Fire and rehire
Employers may consider proposing changes to employees’ contracts of employment.
- If employees do not agree to some or all of the contractual changes proposed by the employer, the employer might dismiss employees, before either offering to re-engage them, or offering to engage other employees, in substantively the same roles, in order to effect the changes.
This is referred to as 'fire and rehire'.
- The Employment Rights Bill includes legislation to end such practices unless employers can demonstrate that they were facing financial difficulties that threatened their viability and that changing the employee’s contract was unavoidable (e.g. it was the only way to prevent insolvency).
- An ET will be required to take into account whether the employer consulted with employees and recognised trade unions in the workplace when deciding if the dismissal was fair.
The Government is now seeking views on whether interim relief should be available to employees who are bringing an unfair dismissal claim under the new right being introduced by the Employment Rights Bill (subject to Parliament’s approval).
Consultation
The consultation closes on 2 December 2024. Responses can be submitted online, by e-mail or via post.
Useful guides on this topic
Termination, redundancy and leaving payments
How are redundancy and termination payments taxed? What amounts can be paid tax-free? What amounts are taxable as earnings?
External link
Department for Business and Trade: Making Work Pay: collective redundancy and fire and rehire
Consultation questions
Collective redundancy
1. Do you think the cap on the protective award should:
- be increased from 90 to 180 days?
- be removed entirely?
- be increased by another amount?
- not be increased?
Please explain your answer.
Increasing the protective award cap
2. Do you think that increasing the maximum protective award period to 180 days will incentivise businesses to comply with existing collective redundancy consultation requirements?
- Yes
- No
- Don’t Know
Please explain why and note any other benefits.
3. What do you consider the impacts will be on employers of increasing the maximum protective award period from 90 to 180 days?
4. What do you consider the impacts will be on employees of increasing the maximum protective award period from 90 to 180 days?
5. What do you consider to be the risks of increasing the maximum protective award period from 90 to 180 days?
Removing the protective award cap
6. Do you think that removing the cap will incentivise businesses to comply with existing collective redundancy consultation requirements?
- Yes
- No
- Don’t Know
Please explain why and note any other benefits.
7. What do you consider to be the impacts on employers of removing the cap on the protective award?
8. What do you consider the impacts will be on employees of removing the cap on the protective award?
9. What do you consider to be the risks of removing the cap on the protective award?
Interim relief
10. Do you agree or disagree with making interim relief available to those who bring protective award claims for a breach of collective consultation obligations?
- Agree
- Disagree
- Don’t Know
Please explain your answer.
11. Do you think adding interim relief awards would incentivise businesses to comply with their collective consultation obligations? Please explain why and note any other benefits.
- Yes
- No
- Don’t Know
Please explain your answer.
12. What do you consider the impacts will be on employers of adding interim relief awards to collective consultation obligations?
13. What do you consider the impacts will be on employees of adding interim relief awards to collective consultation obligations?
14. What do you consider to be the risks of adding interim relief awards to collective consultation obligations?
Further questions
15. Are there any wider changes to the collective redundancy framework you would want to see the government make?
Fire and rehire
16. Do you agree or disagree with adding interim relief awards to fire and rehire unfair dismissals? Please explain your reasoning behind your agreement or disagreement.
17. Do you think adding interim relief awards would incentivise employers to comply with the law on fire and rehire dismissals?
- Agree
- Disagree
- Don’t Know
Please explain why
18. What do you consider the impacts will be on employers of adding interim relief awards to fire and re-hire unfair dismissals?
- Yes
- No
- Don’t Know
Please explain why and note any other benefits
19. What do you consider the impacts will be on employees of adding interim relief awards to fire and re-hire unfair dismissals?
20. What do you consider to be the risks of adding interim relief awards for fire and rehire unfair dismissals?
21. What is your view on whether any adjustments to the current approach to interim relief would be needed to ensure that interim relief for fire and rehire cases can work effectively and be determined promptly by the tribunal?
Respondent consultation questions
About you
22. Please indicate whether you are responding as:
- An academic
- An employer
- An employee/worker/individual
- A Legal representative
- A Business representative organisation/trade body
- A trade union or staff association
- Other (please specify)
23. What sector/industry do you operate in?
- Manufacturing
- Construction
- Wholesale, retail & repair of motor vehicles
- Transport & storage
- Accommodation & food services
- Information & communication
- Financial, insurance & real estate activities
- Professional, scientific & technical activities
- Administrative & support services
- Public admin & defence; social security
- Education
- Human health & social work activities
- Other services
- Do not know
- Prefer not to say
24. If responding as an employer, business, business owner, business representative, what is the size of your business? If responding as an individual or worker, what size workplace are you employed in?
- Micro (fewer than 10 staff)
- Small (11 to 50 staff)
- Medium (51 to 250 staff)
- Large (250+ staff)
- Do not know
- Not applicable
Equality impact
25. Do you believe that our proposals to increase the protective award will have an impact (either positive or negative) on a specific protected characteristic under the Equality Act 2010?
Protected characteristics under the Act are disability, gender reassignment, age, pregnancy and maternity, race, marriage and civil partnership, sex, sexual orientation and religion or belief.
- Yes
- No
- Do not know
Please explain your answer.
26. Where you have identified potential negative impacts, can you propose ways to mitigate these?
- Yes
- No
- Do not know
- Not applicable (no impacts identified)
Please suggest mitigations
27. If responding as an employee/worker/individual, what is your sex?
- Female
- Male
- Prefer not to say
- Not applicable
28. If responding as an employee/worker/individual, what is your ethnic group?
- Arab
- Asian/Asian British
- Black / African / Caribbean / Black British
- Mixed/Multiple ethnic groups
- White
- Other ethnic group
- Prefer not to say
- Not applicable
29. If responding as an employee/worker/individual, what is your religion?
- No religion
- Christian
- Buddhist
- Hindu
- Jewish
- Muslim
- Sikh
- Any other religion
- Prefer not to say
- Not applicable
30. If responding as an employee/worker/individual, do you have any physical or mental health conditions or illnesses lasting or expected to last 12 months or more?
- Yes
- No
- Prefer not to say
- Not applicable
31. If responding as an employee/worker/individual, which of the following age brackets do you fit into?
- 15 or below
- 16-17
- 18-24
- 25-34
- 35-44
- 45-54
- 55-64
- 65-74
- 75+
- Prefer not to say
- Not applicable