HC Deb 25 February 2003 vol 400 cc416-7W
Dr. Julian Lewis

To ask the Secretary of State for Trade and Industry if she will make a statement on the remedies to UK employees of multinationals who have been made redundant without the required(a) process of consultation, (b) notice, (c) definition of the criteria for selection for redundancy and (d) evidence that the post has become surplus to requirements. [98251]

Alan Johnson

[holding answer 24 February 2003]: There is legislation in place to protect employees if they are affected by redundancy. Employees can seek redress through the employment tribunals or, in some cases, the civil courts.

  1. (a) Consultation—Employers in the UK are under a statutory obligation to inform and consult employee representatives about proposed collective redundancies—that is, where they propose to make 20 or more redundancies at one establishment within a 90 day period. The consultation must be conducted in good faith, and must cover ways of avoiding the redundancies, or of reducing their numbers or mitigating their effects. Employee representatives may complain to an employment tribunal where they consider these obligations have not been fulfilled. The tribunal can make a protective award of up to 90 days' pay to each affected employee.
  2. (b) Notice—depending on length of service both the employer and the employee are entitled to a minimum period of notice. Under the legislation this varies depending on how long the employee has been employed, from one week where he/she has been continuously employed for one month or more but less than two years, up to twelve weeks where continuously employed for 12 years or more. An individual employment contract may specify a longer period of notice. Employees who consider that they have incurred loss because they have not been given the minimum notice to which they are entitled under the legislation or under their contracts of employment, can bring actions for damages in the civil courts, or (if the employment has ended) in the employment tribunals.
  3. (c) Criteria for selection—In, a collective redundancy case, the employer must disclose to employee representatives certain information in writing including the proposed method of selecting the employees who may be dismissed. Failure to do so is again enforceable through an employment tribunal.
  4. (d) Redundancy is in principle, a fair reason for dismissal. However, subject to meeting the qualifying conditions, employees can complain of unfair dismissal through an employment tribunal if they believe that they have been unfairly selected for redundancy, that the employer otherwise acted unreasonably in dismissing them or that redundancy was not in fact the genuine reason for dismissal. The remedies available in a case where a tribunal finds in the employee's favour are reinstatement or re-engagement or a monetary award of compensation.

Dr. Julian Lewis

To ask the Secretary of State for Trade and Industry if she will make a statement on her assessment of the relative susceptibility to being made redundant of employees of multinationals operating within the EU of (a) British, (b) Dutch, (c) French and (d) other EU companies. [98252]

Alan Johnson

[holding answer 24 February 2003]: Job losses due to restructuring or plant closure are reported all over Europe and recent examples of this include Dresdner Bank, Siemens and Mobilcom in Germany, HP-Compaq and Bull in France, Lucent Technologies in the Netherlands, Fiat in Italy, Alcatel in Belgium, and Santander in Spain. In some cases these job losses are part of European or global restructuring programmes, for example, Alcatel, Ericsson and Nokia. UK firms, like those on the Continent, are subject to legislation implementing the EC Directive on Collective Redundancies designed to protect employees affected by redundancies. This requires consultation of employee representatives before collective redundancies can be made. Consultation must be undertaken in good faith with a view to reaching agreement, and must include ways of avoiding the dismissals, reducing the number of employees to be dismissed, and mitigating the consequences of the dismissals. The detailed rules vary from country to country, for example, some EU countries have more lengthy consultation periods than others. The law in the UK provides greater protection in certain respects than that in other Member States. For example, Finland, Germany, the Netherlands and Sweden do not, unlike the UK, have a statutory requirement for severance pay. And UK law treats workers more equally in the event of redundancy than workers in Austria, Belgium, Denmark, Greece, Italy and Luxembourg where blue-collar workers receive lower levels of protection than white-collar workers. The system in the UK is relatively transparent and the costs involved for employers and the length of the process are predictable, unlike in many other EU countries. The Government believes that firms should not face excessive barriers to making redundancies that add to the uncertainty and time involved in what is a painful process. To do so could deter investment, and result in fewer jobs overall, not more.