BUSINESS groups in the region have welcomed Government moves to make it easier to make workers redundant.
Employers said the proposed change, which would cut the consultation needed on large-scale redundancies from 90 to 45 days, would benefit both workers and businesses and represents a good compromise of interests.
But Ministers were set on a collision course with unions after they warned staff would lose “vital breathing space” under the new arrangements.
The Government announced yesterday that the 90-day period before large scale redundancies can take place is to be cut to 45 days, as well as plans to exclude fixed-term contracts from collective redundancy agreements when they reach the end of their “natural life”.
Employment Relations Minister Jo Swinson said: “The process is usually completed well within the existing 90-day minimum period, which can cause unnecessary delays for restructuring, and make it difficult for those affected to get new jobs quickly.
“Our reforms will strike an appropriate balance between making sure employees are engaged in decisions about their future and allowing employers greater certainty and flexibility to take necessary steps to restructure.”
Neil Carberry, the CBI’s director for employment and skills, said: “The CBI has long called for a simplification and streamlining of the collective redundancy rules and today’s announcement is a welcome move in that direction.
“The priority for businesses is meaningful consultation. A shorter consultation period will reduce uncertainty for staff and allow businesses to focus on the future more quickly.”
Andrew Hebden, assistant regional director at CBI North East, added: “There are lots of examples in the North East where both sides have worked together to mitigate redundancies. Forty-five days would still be sufficient to allow that to take place.
“I still think 45 days is a reasonable period.”
Dr Adam Marshall, director of policy at the British Chambers of Commerce, said: “In the 21st century, requiring a business to spend a quarter of a year consulting on how to restructure is unnecessary, frustrating and potentially disastrous.
“The new rules will encourage firms to focus on quality consultation with staff and enable timely but fair decisions.”
But Kevin Rowan, regional secretary of the Northern TUC, said the closure of Rio Tinto Alcan in Northumberland was an example where the 90-day period allowed workers to find new employment.
He said: “I know for a fact that there are people working in Nissan and elsewhere who benefited from that 90 days.
“The 90-day period has provided vital breathing space to look at all options within the workplace.
“With large numbers of redundancies the staff turnover is ongoing – within that 90-day period there will be people leaving from other departments.”
Gill Hale, regional secretary for Unison, said: “What it means is that companies don’t have to keep workers on for so long so ‘flexibility’ isn’t the right word. It means they don’t have to pay people for so long while they’re consulting.”
TUC General Secretary Brendan Barber said: “The last thing we need is for the Government to make it easier to sack people.”