On 30 May 2013 the EAT decided that the words "at one establishment" should be disregarded for the purpose of s.188 Trade Union and Labour Relations (Consolidation) Act 1992 ("TULCRA"). This may have significant consequences as employers have obligations to engage in collective consultation with relevant representatives "[w]here an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less...".
The effect of s.188 TULCRA has been that, for example, an employer proposing 10 redundancies at each of its London, Birmingham and Liverpool offices would not be required to engage in collective consultation, because the 30 redundancies were spread across three establishments, each with fewer than 20 redundancies. If the employer were also proposing 20 redundancies in its Cardiff office, it would be required to engage in collective consultation, but only with the affected employees in Cardiff, as the only establishment proposing 20 or more redundancies.
It has long been clear that s.188 TULCRA is not consistent with the European Collective Redundancies Directive 98/59/EC ("Directive"). Under the Directive member states must require collective consultation in one of two situations:
(a) where a certain number of collective redundancies is proposed in a particular establishment, that number depending on the number of employees within the establishment (10 redundancies where 21 to 99 employed, 10% redundancies where between 100 and 299 employed and 30 redundancies where 300 or more employed in the establishment); or
(b) where at least 20 redundancies are proposed within 90 days, whatever the number of employees at the establishments in question.
Section 188 TULCRA implemented none of the alternatives in the Directive but a combination of parts of them. However, it seems that in an appeal brought by USDAW in connection with the redundancies arising from the insolvency of Woolworths, the EAT has disregarded the express wording of s.188 TULCRA in order to make it compliant with the Directive.
The EAT decision of 30 May 2013 (finding that the words "at one establishment" should be disregarded for the purposes of construing s.188 TULCRA) means that the collective consultation obligations under TULCRA are triggered whenever a business is proposing 20 or more redundancies, regardless of whether they are in a single establishment or spread across multiple establishments.
We await the EAT's written decision but if reports are correct this represents a significant change in the law with important practical implications for employers. Employers will now have to consider carefully whether they wish to keep the total of proposed redundancies below 20 across their UK business in order to avoid the collective consultation obligations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.