Collective Redundancy Consultation - Insolvency

11 June 2015

A call for evidence has been published seeking views on how to improve consultation and information sharing between employers and employees when a company is faced with insolvency.

The Insolvency Service is seeking views from industry and the public on the challenges faced by businesses around consulting employees about potential redundancies surrounding insolvency and how to make consultation more effective to improve the outcomes for both the employer and employee.

The call for evidence - Collective Redundancy Consultation for Employers facing Insolvency will run for 12 weeks and is asking views on:

• understanding of the current requirements, their purpose and benefits
• factors that facilitate or inhibit effective consultation
• ensuring timely notification and effective consultation

Background

Employers proposing to make more than 20 employees redundant at an establishment within any 90 day period must consult them and inform the Secretary of State for Business, Innovation and Skills about the proposals.

Consultation can mean that unnecessary redundancies are avoided or the impact mitigated.

Inadequate consultation can lead to a Protective Award being made against the employer by an Employment Tribunal. If the business is insolvent some or all of the Protective Award may be claimed from the National Insurance Fund.

In some high profile cases the cost of this to the taxpayer has run to tens of millions of pounds.

CIPP comment The Policy Team will be studying the call for evidence, and if appropriate will issue a survey in due course.