Firms making redundancies may have to source new jobs


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The European Parliament has voted through a report that suggests that any company with more than 100 staff in one member state (or more than 500 in more than one state) that makes redundancies should be forced to retrain staff to help them move on.

So will it become law, and what would this mean for Britain?

The report

The suggestion came as part of a report in July, from Spanish socialist MEP Alejandro Cercas, which has now been voted through the European Parliament. The idea is to soften the effects of redundancy.

It brings in a 'preparation' phase, during which time everyone affected is given individual guidance and information about their rights and options. They will also have to be given paid time off to job-hunt, and may require retraining to make them more employable elsewhere.

It says: "Companies shall make available to the employees concerned measures that aim to enhance their employability and help them to re-enter the labour market as quickly as possible."

Firms will also have to examine "the psycho-social health of employees affected by restructuring processes, both redundant employees and those staying in the company." This will take place before redundancy, and in the aftermath. If anyone is seen to be suffering significantly the company would be required to offer further help.

They also have to consider the local area, and if they make a large number of people in a very small area redundant, they also have to offer help in generating new jobs locally.

Good idea?

Cercas argued that since 2007 there have been over 5,400 cases of major restructuring in Europe, with total job losses of 1.8 million, and that there is no cross-border approach. He said that there ought to be minimum standards in the EU to prevent individual companies from abusing the workforce. He added: "We need to draw a line between civilisation and barbarity."

However, he had his critics within the parliament. During the debate Slovene liberal MEP Jelko Kacin said: "Restructuring is a natural process in any economy, we shouldn't avoid restructuring, we should use it to give a new impetus to companies that have outdated models."

Employers have said it would have a huge impact on any business that lays people off. Tim Thomas, head of employment policy at the EEF told AOL he stands by the comments he made back in August when the proposals were first put forward. He said: "The UK is trying to overhaul employment law but faces constant tinkering and daft new laws from the EU. Under these proposals, employers will have to negotiate with unions over redundancies in a way they don't at the moment. The rules will make it far harder for employers to make people redundant."

New rules may not be necessary. Debi O'Donovan, editor of Employee Benefits magazine, told AOL that most organisations do what they can for employees anyway. She says: "The majority of large companies would help employees who have been made redundant. It's very common to allow them to use workplace resources to search for jobs and update their LinkedIn profile and CV."

She adds: "We have come across a number of companies who will bring in third parties such as counsellors and recruitment companies to help them find work and deal with the aftermath of redundancy: it's not common practice but it is best practice."

In any case, there's every chance this won't change anything in the UK. It's an "own-initiative report", so even though it has been voted through Parliament, it's not law. The European Commission will have to respond to the report, and could conceivably make the recommendations into laws - which would then need to be brought in around the EU.

However, the economic crisis reverberating around Europe at the moment is likely to mean that the EC recognises that most companies cannot afford to take these sorts of steps. Of course, there are no guarantees, so watch this space.