Rachel Suff: And thank you, Matt, for that very clear, succinct outline of the current consultation. On my first slide, I'm just looking back at where we're up to in terms of the engagement with government around the Employment Rights Act, and specifically the changes around collective redundancy obligations, because this whole area is a really significant part of the Employment Rights Act.
We already have quite complex, very important legislation around collective redundancy consultation obligations, and they're about to become more significant in terms of some of the changes that you and also Mel outlined, some coming through in April already. And the government started consulting in the prelude to drafting its employment rights bill, as was, around a year and three or four months ago. And there was a general consultation on strengthening remedies against abuse of the rules on collective redundancy at that time, because We have been involved and engaged with government throughout the drafting of the legislation and the consultations on this.
We did express concern, having consulted our members on removal of the at one establishment test, because originally it was proposed that would have fallen away completely. And we have real concern coming back from our members around that. So they haven't done away with it completely, but as Matt so clearly explained, because I have to say that when I was getting through to the fourth method, that is being put forward for that threshold test, I was getting quite challenged by the maths. So I think if you put that formula into a real organisation, it could be quite a complicated situation to apply. So yes, definitely the government is more in favour of a single fixed number. I am, it's not only on the government website, it's on my desk at the moment and preoccupying me at the moment, that consultation on setting that new threshold trigger and definitely the feedback I'm getting so far from talking to our members and ER specialists is that a single fixed number is more favourable just in the interest of clarity. and being more straightforward for employers to implement, even though it doesn't take account of organisation size, although as you say, Matt, nor does most employment law.
However, we did point out at the time of that consultation originally in 2024 that there were concerns that for some very large employers, and I've talked to some employers, there's 60,000, over 100,000 staff, that it could be quite a task logistically. where you've got many different sites operating, very different businesses and used to being operating on their own. It could be quite an undertaking to actually make sure that you are tracking every single redundancy and collating those figures to make sure that you are compliant when you hit that trigger. So I think there's still quite a lot to contend with, but we will be putting in our informed feedback.
Just moving on a bit. So that's the situation and we're very keen to give feedback to government. So I'm going to step back a bit and just look at the whole situation of redundancy and the labour market and employment as well, just to give that wider picture for us to think about before we even look at the compliance angle.
So this is our most recent labour market outlook where we survey around 2,000 employers It's representative of the labour market, the economy, and we can see where redundancy intentions are sitting at the moment. On the left-hand side, you can see the graph, where they've been over the last sort of three years, where they've been sort of spiking up and down. But you can see at the moment in the three months, in the quarter to the, in the three months to the end of this month, you can see that overall about one in five employers are planning redundancies. That's a significant proportion of employers across the economy. And you can see a real differential in terms of public sector versus private sector redundancy intentions. Significantly more public sector employers planning on making redundancies compared to the private sector. And that is within the context of wider fall in employment intentions overall in the public sector, or certainly large sections of the public sector, through a combination of voluntary exit and voluntary and compulsory redundancy schemes, several recruitment freezes we've got across government as well. And planned redundancies in the public sector, and I'm sure some of you online with us now are in the public sector, but we haven't seen the number of redundancies in the public sector this high for about seven years. So quite significant. So obviously this new legislation as well is going to have real impact.
So if we just move on as well, again, staying with that wider picture, looking at redundancy in the current climate, the business climate, the employment climate, what is the climate for employee sort of health, wellbeing, resilience at the moment as well? Because we have to think about that in the wider context of undertaking a significant change, restructuring or redundancy programme as well. What's the impact in employment relations? What's the impact on the culture of the organisation and its future? So if we think about that for a minute, the labour market at the moment, as I'm sure many of you will be aware from first-hand experience, is not necessarily easy to navigate for employers or employees and job seekers at the moment. Still living in quite uncertain, disruptive times due to a number of factors that haven't really got time to go into fully. But I'm sure you'll appreciate that it is quite a pressurised time for many organisations, depending on your sector, depending on your operations, depending on your workforce. But in terms of economically and politically as well, and just the pace of change.
So in terms of the landscape, employment landscape at the moment, which I'm going to cover in the next slide, thank you, Kristian. So this is, I'm sure you'll agree, a challenging and complex time for many employers and employees. We are looking at redundancy changes and the obligations and so on in the context of what is the biggest transformation in employment rights for a generation. I've been working in this field for over 30 years and I've never seen such a change in terms of the scale and scope of the employment law changes. I've never seen it on this scale. And of course, this year marks the start of the implementation of those 28 different measures in the Employment Rights Act covering so many different detailed changes of which the collective consultation for redundancy changes are just one element. And we've also got a challenging financial environment.
Our research shows that most employers expect the ERA to increase employment costs. And also those new collective redundancy consultation obligations are going to be implemented in the context of what are sweeping trade union reforms as well. And I won't go through the whole raft, new access rights to trade unions, easier to gain recognition, much simplified industrial action changes. So we can expect greater presence in many workplaces, for trade unions who will be involved in that collective consultation piece. So much wider change is affecting collective consultation in this area.
And generally, in our research, we expect, employers expect an increase in conflict because of the Employment Rights Act. So you have a lot of change in the workplace, a lot of change. You know, what are the implications for employment relations, consultation and how you carry out collective consultation around redundancy and important factors to take into account.
And then from the perspective of employees, it can be a challenging time for employees as well in this labour market and in this wider environment as well in terms of what's going on in the world, in terms of what's going on in people's lives. And we know that the health of the working age population is a real issue in terms of public policy, really high levels of sickness absence at the moment. Now, our good work index at CIPD shows a quarter of employees say work has a negative impact on their mental and physical health. Obviously, we know that a redundancy programme is one of the most significant issues, events that somebody can go through at work. And so how you handle it is going to have an enormous impact on the health and wellbeing of your people and on the ongoing health and resilience of the organisation.
So moving forward, it is really important, as I'm sure you're all aware, to when you are considering redundancy, to look at alternatives. And it's a very important point in terms of compliance as well to avoid unfair dismissal claims. Very important to keep records of how you're looking at ways to avoid redundancies. And this is not an exhaustive list. There are many, many different options you can look at.
So there could be temporary layoffs, you've got to be mindful of any contractual obligations you've got. And it's important to consult, you know, with your workforce alongside considering these changes as well, because also your people might have some ideas and even volunteer for things like unpaid sabbaticals. What about going on an external secondment? You know, there are all sorts of solutions, perhaps alternatives that you could consider in the context of your own organisation. Wage flexibility. I mean, obviously it's never popular to take a pay cut or if you implement a pay freeze, but if your workforce understands that the alternative is compulsory redundancy, then it could be a lot more palatable.
So a lot of different options that you could look at. And by the way, we've got really good guidance where we expand on these in our guide for people professionals on our website that you can access, which I think might have already been put in the chat and we will if not.
And then moving on really to get on to the nub of it really, which is how compassion and compliance should, not only can but should actually go hand in hand. And I know I'm very probably preaching to the converted here, but when you're in such an intense situation of carrying out a restructuring and redundancy exercise, and it is so intense, and for those carrying it out as well, we can't underestimate, overestimate that too. There's no doubt that even if you're doing your very best to avoid job losses, many organisations are going to be forced to make some very tough decisions in the coming months to, and as a last resort, implement a redundancy programme. And it's so challenging for everybody concerned in that organisation. So even those carrying it out as well need as much support as possible.
It's a given that organisations, employers have to comply with the law. And there's a lot of employment law around redundancy, as you'll appreciate from Matt. But it's the heart, it's the heart. So what you do is very important, but how you do it is also crucially important. Handling it in a humane and compassionate way, going beyond the law will really be appreciated by not just those directly affected by that, but by the whole workforce. So making sure there is an ongoing theme of dignity, respect and kindness in how you treat people is really fundamental to how they will be able to cope with it. You might not be able to avoid the outcome you might very well need as an employer to make those job cuts, but how the process is carried out will be instrumental to how people will leave the organisation, be able to go forward with confidence.
Now, communication is crucial, but I know that Victoria's going to talk more about that. But just moving on to finish off really, provide ongoing health and wellbeing support, make it signpost to it, make it very readily available, whatever support you can provide. Some employee assistance programmes even provide it for up to a certain period after people have left the organisation. So you could explore that with your provider. What external signposting to good charities that provide health and wellbeing and mental health support. You know you can, you could signpost there.
Practical support is also so important so that people, if they get outplacement support they could that's going to impact people's feeling of confidence in employability going forward. And then be mindful of the potential impact on the wider workforce. We don't have what's referred to as survivor syndrome for no reason. It's people's colleagues, likely friends that being impacted by the redundancy programme and it's the biggest test really you can have for employment relations and how you treat people and you will leave a lasting legacy in terms of how you have treated people and provide a vision for going forward. It's very important that those who are left in the organisation see their place in the organisation and that real vision. So a lot of it, the whole process doesn't end when people leave, if they have been made redundant. It needs to carry on in terms of building up for the future and building that morale because it can have such a significant impact.
And then finally, we always talk, or at least I always do, about line managers and how they are such a linchpin in any kind of people management process that you're carrying out. And carrying out redundancy exercise, however small or large, is no exception. They are very likely to be the first port of call. They could be dealing with the emotional impact and that whole range of emotions that people will be experiencing if their role is at risk. And so they need to have the resilience, the support, the guidance to make sure that they can deal practically and have the information they need at hand to answer people's concerns, but also that they've got the confidence, to break that news and to support people and know how to signpost people if it goes beyond their capability, as a line manager, people need more expert help.
So to sum up, my final point is that compassion and compliance not only can but should go hand in hand. I'm not in any way playing down how challenging a redundancy programme can be for everybody involved. You might not change the final outcome of having to let people go, but how you handle it will have a lasting legacy. And do check out our guidance.
