Redundancy consultations in spotlight

The government is seeking views on how to improve consultation and information-sharing between employers and employees when a company is facing insolvency.

The Insolvency Service wants to hear from businesses and other interested parties on the challenges around consulting employees on potential redundancies in insolvency situations and how these consultations can work better for employers and employees.

Launching the consultation on 23 March, Business Minister Jo Swinson said: “Constructive engagement with employees is important for business at all times, but especially when facing situations such as insolvency.

“Whilst our current system generally works well…we want to explore in more detail how consultation operates in these situations and what are the challenges and best approaches.”

The call for evidence, which closes on 12 June, can be seen here.

Lara Murray, a specialist in employment law at Palmers, said: “Under existing rules, employers seeking to make more than 20 people redundant at one establishment within any 90-day period must collectively consult employees via elected representatives for a minimum period of time and inform the Business Secretary about their proposals.

“Effective consultation can help to avoid unnecessary redundancies but failing to inform or consult with employees properly can result in a protective award being made by against the employer by an employment tribunal.

“Our employment law specialists can provide expert advice to employers on all aspects of the redundancy process to ensure compliance with the law, including on consultation and employees’ rights to statutory redundancy pay. For more information, please contact us.”