Staff may have an answer when job losses seem the only option

first_img Previous Article Next Article Related posts:No related photos. Comments are closed. Consultation with employees on redundancies can bring some workablesolutions, says Philip WhiteleyAmid the furore of BMW’s deal to sell Rover, it would be easy to assumeemployers have minimal duty to inform staff of closures and redundancies.But while the initial announcement can sometimes be made prior toconsultation, there is continuing legal ambiguity. And there are strict ruleson talks that must be held on the details.Last month a tribunal ruled that Middlesbrough Council was in the wrongafter it issued redundancy notices to 345 employees the day after councillorsapproved the redundancy plan. It came shortly after Personnel Today revealedhow the retail giant Sainsbury’s is facing dozens of claims for unfairdismissal over allegedly illegal setting of criteria while making 100 managersredundant.The law appears to be clear. There must be consultation over redundancies.Where more than 20 staff are affected it must be on a collective basis.Criteria must be fair, and the grounds for job cuts must be genuine financialpressures.Moreover the law was toughened last autumn. All employees in the relevantbusiness unit must be consulted – not just those about to be made redundant.The union must be the consulting partner where it is recognised.Where the grey area occurs is in the stage at which consultation shouldbegin. Middlesbrough Council argued that as long as consultation had begun asdismissal notices are issued this is sufficient. It is to appeal against therecent ruling. Unions argue part of the trouble stems from a misunderstanding of stockmarket rules, which appears to be filtering through to private companies andthe public sector.The MSF is fighting to overturn in the European Court a tribunal ruling itlost last year against United Assurance. The company was formed by UnitedFriendly and Refuge Assurance and said there would be 1,700 redundancies as itannounced the merger.The tribunal agreed there has to be a specific proposal for redundanciesbefore consultation begins. But MSF said that the European CollectiveRedundancies Directive refers instead to consultation where an employer is”contemplating” mass redundancies. Last month it lodged a formalcomplaint with the European Commission.Middlesbrough Council made a similar defence to United Assurance’s, arguingthat it is acceptable to begin consultation once formal notices are issued.Unlike United Assurance, however, Middlesbrough lost, indicating thattribunals view things differently where the stock market is involved. Rationale”The whole rationale behind having some sort of legislation forinformation and consultation was to provide ways and means of avoidingredundancies and numbers affected,” said Harriet Eisner, internationalofficer at the MSF union, which was not involved in the Middlesbrough case.”We are saying that all we want is the chance to negotiate in order tomitigate redundancies,” Eisner added.Talk like this can receive a dismissive response from employers.Consultation can slow things down, they argue, and make matters worse; themarket situation can deteriorate during the delay and more cost-cutting neededas a result.WisdomBut this supposes that managers have a monopoly on wisdom. Last yearRolls-Royce & Bentley needed savings, but through its partnership with theunions came up with new banked hours arrangement. The agreement prevented 400lay-offs and meant the company held on to scarce skills. “Five years ago we would have dealt with this throughredundancies,” change management director Paul Victor told the Anumanconference earlier this year. “We looked at possible solutions and came upwith 17, the most significant of which developed into the time bankingagreement.”The utility Centrica has avoided industrial action and maximised options forredeployment by keeping lines of communication open.The cases raise the point, do employers protest too much? Research byWarwick University indicated that consultation can substantially alter theterms on which people are laid off, in some cases to the mutual benefit ofemployees and the company.”The previous government’s ‘minimalist’ approach, intended to bebusiness-friendly, may have proved counter-productive,” researchers MarkHall and Paul Edwards wrote in the Industrial Law Journal.Yvonne Bennion, policy specialist at the Industrial Society, said employersshould focus more on best practice than on the law. “If an organisationthinks that all it has to do is observe minimum compliance with the law then itis not going to manage its relationships with its employees effectively,”she said.”Whenever redundancies occur, the whole basis of trust in anorganisation is called into question. Sometimes organisations think that theydo not have time to consult, but involving employees early on can sort out a lotof the problems. Lack of consultation will hinder the progress that theorganisation is trying to make.”Employee representatives can offer solutions, as in the Rolls-Royce &Bentley case. Individual performanceBennion said, “I was in a situation where I had to make some peopleredundant, and on the face of it looked as though there was a very strong casefor making a certain individual redundant. But when we went through all thecriteria we discovered very important aspects on individual’s performance whichhad not really been known before.”Trust on the part of employees can take years to rebuild, and isincreasingly recognised as key to competitive advantage. Employers need to takenote before they swing the axe.www.dti.gov.uk/emar Staff may have an answer when job losses seem the only optionOn 11 Apr 2000 in Personnel Todaylast_img

Leave a Reply

Your email address will not be published. Required fields are marked *