The duty to collectively consult under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 ("TULCRA") arises when an employer 'proposes to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less'. There has been much case law about what is meant by 'propose' and it is accepted that TULCRA does not precisely implement the directive, which refers to an employer 'contemplating' collective redundancies.
UK case law has held that an employer is likely to 'propose' to make collective redundancies prior to an actual decision to make the redundancies being taken; however, 'propose' is more than mere contemplation of the potential for redundancies. This view has been supported to some extent by the recent ECJ case of Akavan Erityisalojen Keskusliitto AEK ry and Others v Fujitsu Siemens Computers oy.
The ECJ case examined the expression "contemplating collective redundancies" in article 2(1) of the EC Directive on collective redundancies (98/59). The ECJ ruled that the collective consultation procedure is triggered once a strategic or commercial decision compelling an employer to contemplate or to plan for collective redundancies has been taken.
Unfortunately the decision of the ECJ is somewhat confused in its consideration of when the obligation to consult is triggered as opposed to when the consultation should start. In respect of the latter, the ECJ concluded that where a parent company is making decisions on behalf of its group companies, it is the subsidiary itself that must carry out the consultation and therefore the consultation procedure cannot be started before the relevant subsidiary is identified.
The ECJ also considered whether the start of the consultation procedure was dependent on the ability to supply to the workers' representatives all the information required. As article 2(3) requires the information to be provided "during the course of the consultations" the ECJ concluded that all the information does not have to be provided at the start.
In summary, although it is generally accepted that TULCRA does not properly implement the directive this case indicates that ECJ and UK views share some similarities, in particular that triggering the duty to consult too early may undermine the purpose of the directive, e.g. unnecessarily unsettle employees about their job security. As to when an employer is to start consultation the directive and TULCRA both take the approach that an employer should work backwards from when the first dismissal is to take place. UK employers should remember that they have to consult in "good time" and at least the relevant period of 90 to 30 days (depending on numbers made redundant) prior to the first dismissal.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
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The original publication date for this article was 22/09/2009.
