WHEN large-scale redundancies are announced, the three-month statutory period of consultation which brings employers and employees together often results in saving some jobs and producing a positive outcome.
Cutting the entitlement in half from 90 days to 45, as planned by the UK Government, is intended to boost business by enabling restructuring to be completed more promptly. But reducing the period of redundancy notice at a time when jobs are scarce will inevitably make it more difficult for workers to find alternative employment.
The Department for Business, Innovation and Skills has said the reduction would still allow full employee engagement and offer employee representatives a statutory right to contribute to the process. The main argument for reducing the 90-day window is that the timespan is an obstacle to restructuring, which must be carried out urgently to help ensure a business remains viable.
Employers' organisations have welcomed the reduction as a positive reform. Trade unions have dismissed as absurd claims that it will encourage companies to take on new staff. These opposing standpoints will surprise nobody. It is unfortunate that they will reinforce the divide between employer and employee because the reality is that the two sides have worked together to redeploy workers and reduce redundancies where possible. As the outgoing General Secretary of the TUC Brendan Barber points out, unemployment is not as high as many feared because employers have worked with unions to save jobs, even if it has meant reducing hours.
The fact that the consultation process was usually completed within 90 days was cited as a strong argument for shortening the period by the Liberal Democrat Employment Relations Minister Jo Swinson. It is significant that the new time frame is 45 days and not the 30 originally proposed by Adrian Beecroft, the Tory donor commissioned by David Cameron to find ways to free British industry from red tape. His report, which most controversially proposed a no-fault dismissal for firms with fewer than 10 employees, caused tension between the Conservatives and LibDems, prompting Business Secretary Vince Cable to say it was not the job of government to scare the wits out of people.
Ms Swinson must finding a compromise acceptable to both Coalition partners. In the present economic climate, employers' reluctance to take on new workers is understandable. Eroding hard-won protection for employees, however, is no guarantee of growth.
The intensive effort put into saving jobs at Halls of Broxburn and finding alternative work for the 1700 employees demonstrates just how complex that process is, especially when a major employer in a small community shuts down.It should be recognised that reducing the consultation period at a time of high unemployment risks adding to the jobless total instead of reducing it. And when redundancies affect the whole workforce, there is more to be lost than gained.
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