Collective Redundancies: Information, Consultation and Protection By Giles Powell. Contents When does the duty to consult arise and what does it extend to? The “Special Circumstances” Defence Protective Awards. WHAT IS REDUNDANCY ?
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
By s.195(1) of TULRCA “references to dismissal as redundant are references to dismissal for a reason not related to the individual concerned or for a number of reasons all of which are not so related”.
Junk v Kuhnel  IRLR 310 (ECJ) – redundancy is the declaration of the intention to terminate (ie the giving of notice) rather than the actual termination of employment on the expiry of the notice period.
(Application in the UK confirmed by the EAT in Leicestershire County Council v Unison  IRLR 920)
Dismissal (and those dismissed) includes:
Non renewal of a limited term contract
Those whom the employer hopes to re-deploy if it intends to withdraw existing contracts of employment
Those who accept voluntary redundancy
Rockfon A/S v Specialarbejderforbundet i Danmark  IRLR 168 (ECJ) – Establishment means “the unit to which the workers made redundant are assigned to carry out their duties. It is not essential, in order for there to be an “establishment”, for the unit in question to be endowed with a management which can independently effect collective redundancies”.
Athinaiki Chatropoiia AE v Panagioutidas  IRLR 284 (ECJ) – applied Rockfon – separate production unit could constitute an establishment.
R v British Coal Corporation ex p Vardy  IRLR 104 (Divisional Court) – “verb “proposes” .. relates to a state of mind which is much more certain and further along the decision-making process than “contemplate”
NB UK Coal Mining v NUM  IRLR 4 (EAT) – “in a closure context where it is recognised that dismissals will inevitably, or almost inevitably, result from the closure, dismissals are proposed at the point when the closure is proposed.”
See also Akavan Erityisalojen Keskusliitto AEK v Fujitsu (Case C-44/08) – referred to the ECJ on 8 February 2008. Concerns the link between the point at which consultations must begin and the point at which strategic decisions are made. It also concerns the application of the requirement to consult in a group scenario when decisions may be taken at a group rather than subsidiary level.
Previously accepted position: consultation must be fair and reasonable but there is no need to consult on the economic background or context in which redundancy proposal arises.
However, see now UK Coal Mining v NUM  IRLR 4 (EAT) – in the context of the closure of a mine, the obligation to consult over avoiding the proposed redundancies “inevitably involves engaging with the reasons for the dismissals, and that in turn requires consultation over the reasons for the closure”.
Section 188(7) gives the employer a defence if there are “special circumstances which render it not reasonably practicable for the employer to comply with a requirement of subsection (1A), (2) or (4).”
A high test:
- Clarks of Hove Ltd v The Bakers’ Union  IRLR 366 (CA) – events that are “normal” for companies facing difficulties will not constitute special circumstances. There must be something out of the ordinary such as a sudden disaster or unexpected insolvency. Insolvency is not on its own a special circumstance.
Examples of unsuccessful defences:
Examples of possible successful defences:
Disappearance of last prospective purchaser for company in real difficulties when there had been a real prospect of a purchaser being found
Unexpected refusal of a government loan
Withdrawal of a prospective purchaser followed by a sudden withdrawal of bank support
NB It is still necessary for an employer to take “all such steps towards compliance with that requirement as are reasonably practicable in those circumstances” (Section 188(7) TULRCA 1992)
Futility of consultation as a defence?
No – see Iron and Steel Trades Confederation v ASW Holdings Plc (in administrative receivership) UKEAT/0694/04/DM
Possibly – see Amicus v GBS Tooling Ltd (in administration)  IRLR 683 (EAT)
Yes – it is not a piece of elastic that can be stretched forever – Vauxhall Motors Ltd v T&GWU  IRLR 674
Focus to be on employer’s default and not loss to employees. – Susie Radin Limited v GMB  IRLR 400 (CA)
Futility of consultation should not affect the amount of the award - Susie Radin
“Maximum period” means 90 days even where the requirement to consult was for 30 days – Hutchins v Permacell Finesse Ltd (in administration) UKEAT/0350/07
Insolvency of employer does not mean that a protective award should not be made - Smith v Cherry Lewis  IRLR 86 (EAT)
Who may claim?
A trade union, if recognised in respect of a class of employees, may only complain of failure to consult on behalf of that class and not on behalf of other employees – T&GWU v Brauer Coley Ltd  ICR 226