Reports of significant change to collective redundancy consultation laws

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Published

Media reports circulating over the past few days have commented on an Employment Appeal Tribunal case (the written judgment is not yet available) which could have significant implications for UK employers.

It has been reported that collective redundancy consultation will be triggered where there are 20 or more potential redundancies at an employer and not, as is currently the case, where there are 20 or more potential redundancies at one establishment.

The Law

As readers will be aware, current UK law (s.188 Trade Union & Labour Relations (Consolidation) Act 1992) provides that: "Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals…", the key word being "at one establishment". Because of this focus, much attention is placed on which sites, business units, etc. count as the same 'establishment' and should therefore be grouped together when assessing whether or not the proposals affect 20 or more employees at one single establishment.

However, the EU Directive (which s.188 is intended to implement) requires collective consultation where the number of redundancies is, "over a period of 90 days, at least 20, whatever the number of workers normally employed in the establishments in question" (note: plural).

Decision

In interpreting UK legislation to give effect to our obligations under EU law "so far as possible", the EAT argued that the correct approach is to aggregate the total number of potential redundancies across all affected establishments to determine whether or not the obligation to collectively consult has been triggered. Other EAT's that have looked at this issue in recent years have declined to interpret UK law in this way, and it is not clear why the EAT in the current case has departed from this.

Comment

Until we see the written judgment we cannot provide any definitive comment. It is also currently unclear whether this decision will be appealed.

If correct, this case will have major ramifications for multi-site employers proposing redundancy dismissals or changing terms and conditions on a large-scale. Not only will the obligation be triggered in more cases, but employers may also need to reconsider whether they are obliged to consult for 30 or 45 days.

We will keep you updated.

USDAW and others v WW Realisation 1 Limited (in Liquidation) and others (judgment pending)

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Media Team 020 7654 1576

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