Government to review consultation law

The government has announced that it will review the law relating to collective redundancies in the wake of recent decisions by multinationals such as Vauxhall and BMW to reorganise and close plants without having consulted staff.

Trade and Industry Secretary Stephen Byers wants to involve the TUC and the CBI in considering whether the current laws are working and, in particular, whether more should be done to promote effective consultation.

Unions are concerned however that the review may be being used to deflect criticism from the government's continuing refusal to sign up to the European Union information and consultation directive. Bill Morris, general secretary of the T&G transport union, describes the proposal as "at best a clumsy attempt to reinvent the wheel" and "at worst a cynical diversion". The TUC, while not opposed to a review, also says that this cannot be offered as an alternative to adoption of the directive.

The existing UK law on consultation says that employers should consult when proposing redundancies. However, if they fail or refuse to do so, the only penalty they face is having to pay a protective award, a fairly small sum of money to individual employees. It is not clear how the government would intend to strengthen the existing legislation.