Most businesses from time to time have to regrettably look at the question of redundancies, but in recent years there has been uncertainty over whether or not collective consultation obligations are triggered and therefore how long redundancy consultation should last.
Well, at last, there is some good news from the European Court of Justice who have indicated what they believe one establishment means when looking at redundancies. This could have a significant, beneficial, impact upon those employers who have multiple offices or sites.
At present, if an employer is proposing to make 20 or more redundancies within 90 days, then case law provides an argument that they are obliged to inform and consult with appropriate representatives wherever the redundancies are taking place, even if it is over multiple sites as long as the employer is the same. This means that the employer (a) in most cases needs to organise the election of representatives and (b) inform and consult with those representatives; (c) ensure no dismissals take place for at least 30 or 45 days. Fail to get it right and an award of 90 days' pay can be made in respect of each affected employee. This is despite the fact that the law refers to the redundancies taking place "at one establishment", but the courts were concerned that by only looking at one establishment they would not be complying with EU law.
The Advocate General has now said essentially that there was no need for the UK courts to be so worried, they can limit the obligation to where the redundancies take place at one establishment and that an establishment is the actual 'local employment unit' and not all of the employer's premises taken together. The European Court (and the Court of Appeal) still needs to give its final decision later this year, but assuming it follows the Advocate General's opinion, then businesses will hopefully find that the regulatory noose has been loosened a bit.
If the Advocate General's opinion holds good, then for an employer making 19 redundancies in say Preston and 19 redundancies in London, in most cases they will no longer have to elect representatives and collectively consult. However, until the Courts' decisions are given, we are in a holding pattern – for the moment then, businesses should continue to seek advice on how best to deal with such scenarios.
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