Mass redundancies across the UKhave led DTI Secretary Stephen Byers to take another look at consultation, asRichard Staines reports. But HR has been left out of the review so PersonnelToday raised this with the GovernmentIn the past two months, morethan 6,000 jobs have been axed by steel giant Corus and 2,000 by car makerVauxhall. In both cases, staff were informed of the restructuring on the sameday the media were notified. It has prompted a storm ofprotest from politicians, unions and the public, and has raised doubts over theUK’s voluntary partnership approach to staff consultation. Trade and Industry SecretaryStephen Byers responded to the mounting pressure by announcing a review inJanuary to establish if the laws requiring consultation “in goodtime” are working and if more should be done to promote effectiveconsultation with employees.But many are critical of thewoolliness of the proposed review. There are scant details on the timing of thereview and how it will be conducted. Also, the Government intends to consultonly with the CBI and TUC. It will not include the CIPD in the process and willthus be ignoring the views of HR professionals. Mike Emmott, the CIPD’semployee relations adviser, said, “I think it is regrettable that we arenot being consulted. The knowledge and experience of CIPD members have on thisissue could be very helpful and would add weight to the rather limitedconsultation process.”Many are concerned that with anelection looming the review is simply a PR exercise. Emmott said, “I don’tbelieve this review will really change things legally ñ it will just clarifythe Government’s standing on this issue.”HR directors such as BruceWarman at Vauxhall and Allan Johnston at Corus have been in the eye of theredundancy storm, so to exclude their opinions and those of their peers isshort-sighted. In response, Personnel Todaysent a letter to Byers this week calling for a thorough and speedy review thatproduces more than just pre-election soundbites. Employers have made it clearthat they do not want the DTI review to strengthen consultation law inemployees’ favour. Under current UK law, companiesmust consult with employees for 90 days following a mass redundancyannouncement.Increasing globalisation andthe strength of the pound are making it hard for UK manufacturers to compete intheir markets. Warman claims that a strengthening of consultation legislationwould have little impact on business. He said, “The lobbying ofthe Government to beef up employee consultation rights will make littledifference to the decisions being made. This will not add value to thelegislation in place in the UK ñ it’s like trying to impose a stock solution onto a multi-coloured tapestry of arrangements.”Peter Sheraiker, group HRmanager for furniture manufacturer Tetrad, agrees. “The Government isoblivious to the pressure the manufacturing industry is under in the UK. We arejust not competitive enough, but this has nothing to do with employeeproductivity. The issue is much wider and concerns the strength of the poundand the competitive labour market.”The CIPD, CBI and the Employers’Forum on Statute and Practice all urge the Government not to reduce employers’rights to make business decisions. EFSP chief executive RobbieGilbert said, “We already have a requirement to have representation whenthere are redundancies already. We do not think it is necessary to have somekind of standing arrangement to cover redundancies.”CBI policy adviser Simon Blakesaid, “The impact of any legislation will be to slow down thedecision-making process. You cannot legislate for good management. If you do,then it results in a compliance approach, which becomes a cost rather than abenefit to business.”But the momentum for change tothe consultation process is increasing. In a recent Commons debate, Labour MPTony Lloyd said, “The right to know what is going on and what is likely toaffect individual employees simply does not exist for most who work in Britishindustry and commerce. “It would be a tragedy ifwe turned our backs on the clear need for change following the terribleexperiences of British workers in recent months.”The 50 MPs involved in thedebate went as far as “naming and shaming” companies over theirconsultation policies. The list includes GM-Vauxhall, Coats Viyella, Biwaterand Xerox.The TUC claims that existinglegislation, such as the European Works Council directive, needs to have moreteeth. Sarah Veale, employment rights officer at the TUC, said that while thedirective does apply to the Vauxhall and Corus announcements, it only has thepower to impose fines of up to £50,000. Veale said, “What we wantis legislation that is more punitive and will make employers think twice beforemaking decisions without consulting. “A good employer shouldhave nothing to fear from consulting with its workforce before such decisions ñindeed the process could turn up creative solutions to the problems it faces.”Casestudies: Staff consultation in practiceA detailed DTI study onredundancy consultation looks at how eight unidentified companies consultedtheir staff when making employees redundant. Here we select two cases andpull out key points for employers. Under UK legislation, all employers thatannounce more than 20 redundancies in a 90-day period have to consult withelected representatives from their workforce.EngCo is anengineering company of 530 employees with little history of redundancy, but itneeds to remain competitive. It decided to outsource some activities, whichresulted in job losses. The firm had an established shopfloor union, but officestaff did not belong to a union. It was making 65 people redundant. What HR canlearn: The report claims that consultation is more effective than issometimes suggested, although there are limits to it. It says, “Inpractice the key decisions were made by management, with consultation focusingon the process of handling job losses not the principles.”The union was able to defendthe established principle of last in, first out, and also to shape thedefinition of how the principle actually worked. It also made suggestions forreorganisation, which were felt to have saved four or five jobs out of 65.Management also had to consultwith non-union office staff, and representatives there also made suggestions asto how to avoid some redundancies, for example, reducing the use of temporarystaff and through redeployment.The more positive outcomesoccurred where management took “a participatory and flexibleapproach”. DistribCois part of a large company of 840 staff and specialised in overnightdistribution. Reorganisation led to the closure of a depot that affected all 46workers and there was no need for specific selection criteria. The firm isunionised and consultation was through long-established channels.What HR canlearn: As the report says, “often redundancy is often part of a widerrestructuring agenda”. In the DistribCo case there were obviously othermatters to be resolved first. Debate focused not so much on the redundancies ason associated changes in terms and conditions for staff who remained inemployment. Some small concessions weremade, but union and staff remained unhappy about having to accept significantlychanged working practices. One key lesson on consultingwith staff over redundancies stands out in the report ñ make sure that staffrepresentatives are trained and have the information to perform their role.Employers should develop guidance for their staff, possibly using theiremployers’ associations or professional bodies to indicate good practice.Source: DTIresearch paper, Redundancy consultation: a study of current practice and theeffects of the 1995 regulations (1999) Related posts:No related photos. Previous Article Next Article Is review really just a pre-election stunt?On 13 Feb 2001 in Personnel Today Comments are closed.