Collective consultation – A significant change in the law

Euan Lawrence

Euan Lawrence

Earlier this year, the Employment Appeal Tribunal (“EAT”) decided on a case, which is likely to have far reaching consequences for employers seeking to make multiple employees redundant over several different offices.

The Case

The case in question (one of two linked cases) was called USDAW v Woolworths and concerned employees who had been made redundant from Woolworths when the company went into liquidation in 2008.

Collective consultation is required by section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULCRA”) in circumstances where an employer proposes to make redundant “20 or more employees at one establishment within a period of 90 days or less”. The process of collective consultation involves the employer consulting with elected employee representatives for a period of no less than 30 days (longer if it is proposed that 100 or more employees be made redundant).

In this case, Woolworths only consulted with those employees who worked in stores where 20 or more employees worked. This was (until this judgment) a very common approach to take (accepted practice in fact) given the clear wording of TULCRA which stipulates that employees are only entitled to be collectively consulted with if 20 or more employees are being made redundant “at one establishment”.

The Employment Tribunal decision and the appeal

The Employment Tribunal at first instance also tacitly endorsed this approach, holding that employees were only entitled to be collectively consulted with in circumstances where there were 20 or more working at one store. The Unions disagreed with this and appealed the decision on the basis that:

  • TULCRA was enacted to bring into force within the UK the provisions required by      the EU Collective Redundancies Directive (No.98/59) (“Directive”).
  • The Directive did not explicitly limit the right to collective consultation to      circumstances where 20 or more employees were being made redundant at one      establishment (rather it refers to situations where the number of redundancies is “at least 20, whatever the number of workers normally employed in the establishments in question“).
  • Therefore, TULCRA – as drafted – had the effect of diluting the employment rights      envisaged by the Directive, which cannot have been the intention of parliament.

The EAT decision

The EAT agreed with the Unions and found that, in order to deliver the core objective of the Directive it was necessary for them to give a purposive interpretation of TULCRA and, in effect, delete the words “at one establishment” when reading section 188. This had the consequence of entitling 3,233 employees from Woolworths to protective awards.

The implications of the decision

The implications that this case has for businesses with several offices/premises are potentially significant. If this decision stands (and it is still ‘if’ on the basis that the Secretary of State may attempt to appeal this decision to the Court of Appeal) it will mean that employers proposing to make 20 or more employees redundant from any of their offices in the UK within a 90 day period will have to enter into collective consultation at all affected premises where previously this might have only applied to some of its larger offices or, indeed, not at all.

Euan Lawrence
Solicitor
Blacks Solicitors LLP
ELawrence@LawBlacks.com
0113 227 9207
@EuanLawBlacks

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