Easier to make UK employees redundant than their European counterparts?

It’s always a sad day when UK workers lose their jobs, particularly when they work hard and are a productive team. Yesterday it was announced by tyre manufacturer Goodyear Dunlop that they intended to close their plant in Wolverhampton with the loss of 330 jobs.

Consultation with staff has begun as senior management have started to look at cheaper manufacturing sites around the rest of Europe, the Middle East and Africa.

The company confirmed that the move to close the factory was due to “changing market conditions” however Gerard Coyne, Unite regional secretary for the West Midlands, has doubts about this a statement because the Wolverhampton plant is a productive one.

This manufacturing site may be more productive that other Group plants in France and Germany If this is true, then the decision to close it doesn’t make sense, so much so that Mr Coyne has suggested that the decision to close this UK plant was simply because the employment laws in the UK make it easier and cheaper to make employers here redundant rather than our European counterparts – so what is the truth?

Nicola Williams, of Michael Lewin Solicitors commented

In a nutshell, Mr Coyne is correct.

The EU Collective Redundancies Directive contains procedures and warnings for employers if they wish to make a workforce of over 20 employees redundant. Under the Directive, any employer considering collective redundancies must hold consultations at least 90 days before the date of dismissal with the employee’s representative(s) with a view to reaching an agreement. These consultations must cover means of avoiding collective redundancies and reducing the number of employees affected.

Member States must draw up their own legislation to implement this into their own system, which may vary from country to country as long as the objective of the Directive is in place. In the UK, this was reduced to 45 days in April 2013, so this puts employees in the UK at a disadvantage in comparison to other Member States.

In terms of redundancy pay the UK has one of the worst in the EU for several reasons. In many countries, the amount an employee is entitled in dependant on their length of service. In the Czech Republic, Denmark, Hungary, Italy, Lithuania, Poland, Portugal, Slovakia and Spain, employees with service of up to one year are entitled to redundancy pay (in most cases one month’s pay). The UK requires a two year minimum period of service they are entitled. However it could be worse as Luxembourg requires minimum of five years!

In the UK, redundancy pay not only depends on employee’s length of service but also on their age. Employees aged 18–21 receive half a week’s pay for each full year of service, while those aged 22–40 receive one week’s pay, and those aged 40 and over receive one and a-half week’s pay.

In terms of the amounts paid for redundancy the UK’s statutory minimum also falls short in comparison. An example of which would be a 40 year old employee made redundant after 10 years of service on a £20,000 salary. While the average redundancy pay across the EU would be £11,163, UK employers would only be entitled to pay £4,750. This employee would also be entitled to an additional 10 weeks’ notice pay”

We hope that the 45-day consultation process will allow Goodyear Dunlop to take time to work with the employees and their representatives and will continue to explore alternatives that will avoid the wholesale closure and job losses at Wolverhampton.

Goodyear Dunlop have a long and proud history in the UK and have been made successful in part by many thousands of loyal employees over the years, so we hope that they deal with these ‘at risk’ workers in a fair and reasonable manner, and with the dignity and respect that they deserve.

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