Collective redundancies

When an employer makes large scale (20 or more) redundancies it is obliged to consult with its recognised trade unions or other appropriate employee…

When an employer makes large scale (20 or more) redundancies it is obliged to consult with its recognised trade unions or other appropriate employee representatives.  One of the essential topics for consultation is about ways of avoiding the redundancies. 

Problems arise when it is intended to close a workplace.  If an employer has already made that decision it is not then possible to consult in any meaningful way about avoiding redundancies. 

In 2005 a landmark case of UK Coal Mining v NUM decided that employers were obliged to consult about the reasons for closing the workplace, not just presenting closure as a business decision already made.

The more recent case of USA v Nolan considers further the extent of the obligation to consult in circumstances of workplace closures.  Mrs Nolan, a former civilian employee at a US airbase in Hampshire has taken on the might of the USA in challenging its compliance with collective redundancy consultation. The USA decided to close the airbase without first consulting appropriate employee representatives.  The Employment Tribunal which first heard the case decided that the USA had indeed breached its collective consultation obligations. 

The USA appealed and the case reached the Court of Appeal which has just decided to refer the matter to the European Court of Justice for a ruling on the extent of an employers collective consultation obligations.  

This referral will take some time (we estimate at least 12 months) and yet the uncertainty surrounding the position comes at a stage when, unfortunately, many UK employers are contemplating redundancies.  Currently the safe approach is to engage in consultation about the reasons for a workplace closure.

Generally, it is crucial to ensure that employers recognise and comply with collective consultation obligations when dealing with redundancies. The penalties for a failure to comply are very significant. 

We will report in a later edition the outcome of the European Court of Justice referral.

Mark Leach, Partner, mark.leach@weightmans.com

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