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New ACAS code of practice on collective redundancies

12 April 2013 #Employment


On 6th April 2013, with the changes to the rules on collective redundancy, ACAS has published a code of practice.

When proposing to make redundant 100 or more employees at one establishment within 90 days, an employer must start consultation and notify the Secretary of State at least 45 days before he intends to dismiss the first employee. This figure has been reduced from 90 days. This period remains at 30 days before dismissal of the first employee when the number of employees being made redundant is between 20-99.

A tribunal still retains the power to issue protective awards to successful applicants for a maximum period of 90 days giving them full pay for this period. This could be very costly for an employer in a mass redundancy situation.

The ACAS code suggests that employers should develop a collective redundancy procedure which should contain measures for avoiding, reducing or mitigating compulsory redundancies. Methods for doing this include voluntary redundancy with enhanced payments; restrictions on recruitment; alternative employment within the business as well as reducing or cutting overtime.

The procedure should contain guidance on selection criteria where redundancy is unavoidable and a mixture of selection criteria should be used to avoid overemphasise on one particular point and to avoid the risk of unfairly discriminating employees.

Employers should have a policy of helping redundant employees obtain training and search for alternative work. A reasonable amount of time off to look for new work or to find training is available by law to employees with notice of their redundancy. They must have been continuously employed for two or more years and the employer must pay at least 40% of the employee’s weekly wages for, however long they are off. The ACAS code suggests where possible that employers should extend this to all employees who are affected by redundancy. Another way of helping the employees find work is to use the Rapid Response Scheme set up by Job Centre Plus which can provide support to employees in finding training or other work.

The code also suggests having an appeals procedure so employees have the chance to speak up if they believe that they have been unfairly selected for redundancy.

It recommends that employers offer counselling services to the employees affected by redundancy and it provides that they should be given information on the financial effects of redundancy.

The code suggests that even after the employees are made redundant, the employer should take steps to look after those who are still employed by the business as the situation may have had an impact on them.

It is suggested that employers should keep their line managers updated on developments and give them training on active listening and handling difficult conversations. The employers are also encouraged to work on their relationships with the trade unions and employee representatives on an ongoing basis and to try and pay attention to the health and well being of staff.

The compliance of employers with this new code should ensure that they maintain a stable workforce and avoid having to pay out large amounts of money to employees for not carrying out an effective consultation process.

Daniella Fardo
LPC Student, University of Glamorgan

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at employmentunit@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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