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.

Line of workers

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:

  1. Increase the protective award that an ET can award from 90 to 180 days.
  2. 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

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