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Tuesday, 18 December 2012

Redundancy consultation period to be reduced from 90 days to 45 days

The consultation period required for large scale redundancies is to be changed from 90 days to 45 days under new rules being introduced in April 2013.  This will bring the rules into line with other EU countries.  This will only apply where more than 100 people are being made redundant.  Currently if you are to make redundant less than 100 people then the consultation period is only 30 days.  Less than 20 people and there is no need for any consultation period.

The move from 90 days to 45 days in bigger businesses has been broadly welcomed by restructuring experts as companies in difficulty need to be turned around quickly and any delay can exacerbate the problem.  It is often the case that the required consultation is carried out before the 90 days are up anyhow i.e. the consultation does not have to take 90 days prior to making redundancies.

Whilst there is a duty to consult, an employer is not prevented from making redundancies if after meaningful consultation has taken place, no agreement can be reached.

How this will actually impact the world of restructuring and saving companies it remains to be seen but it could help focus minds to effect a rapid turnaround of a distressed business.












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