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When Do You Need to Use Collective Consultation?

on Friday, 27 November 2020.

This article provides a brief overview of the statutory obligations to consult and an update on the newly reported case of UQ v Marclean Technologies SLU.

The obligation to collectively consult is set out in section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA). The obligation derives from an EU Directive (the Directive)

The obligation is triggered when an employer proposes to dismiss as redundant 20 or more employees within a period of 90 days or less at one establishment.

Some employers may have their own agreements to collectively consult with workers or unions. This article is only about the statutory obligations in TULRCA.

What Does an Employer Need to Do?

If the obligation is triggered an employer must consult appropriate representatives of the affected employees. These representatives can include:

  • Trade Union Representatives
  • Elected Representatives (for instance where the affected employees have elected a particular representative or representatives)
  • Standing body of elected or appointed representatives

Written Information

The employer will be required to provide written information to the employee representatives, which should include such information as:

  • the reasons for dismissal
  • the numbers involved
  • the proposed method of selection
  • procedure for dismissal
  • redundancy calculation payments

The employer must also provide information about the proposed redundancies to the Secretary of State via the HR1 form.

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Consultation

The written information should be followed by a consultation process. This process requires consideration of potential ways of avoiding dismissals, reducing the number of dismissals and mitigating the consequences of dismissal.

Time Limits

The employer must adhere to strict time limits for collective redundancies. Where an employer is proposing to dismiss more than 100 employees at one establishment within a 90 day period, the consultation must begin at least 45 days before the first dismissal takes effect. If the employer proposes making between 20 and 99 employees redundant in a 90 day period the consultation must begin at least 30 days before the first dismissal takes effect.

UQ v Marclean Technologies SLU

This is a Spanish case that was brought before the European Court of Justice (ECJ). The case revolved around the question of whether UQ was unfairly dismissed as part of an alleged covert collective redundancy. UQ worked for Marclean in Spain and was dismissed on 31 May 2018. In June 2018, she brought a claim, arguing that between her dismissal and 15 August 2018 a further 36 employees were dismissed and that this formed part of a covert collective redundancy, and that the employer was trying to avoid its obligations to consult employees.

The key question for the ECJ was how to measure the 30 or 90 day reference period contained in both the Directive and TULRCA. Was 31 May 2018 the start, mid or end point of this reference period?

The ECJ held that if the threshold number of dismissals falling within the definition of "redundancy" is reached at any point across a rolling period of 30 or 90 days (including the date of the dismissal itself), the Directive applies. This means that in order to comply with the ECJ's decision a court must look forward and back from the date of dismissal to determine the correct reference period.

This decision does not sit well with some of the detail within TULRCA, for example the provision within section 188(3) which states that when determining how many employees an employer is proposing to dismiss as redundant no account shall be taken of employees in respect of whose proposed dismissals consultation has already begun. In light of this it will be interesting to see how it is applied in the UK.

What Does This Mean for Employers?

When processing dismissals that may count towards the total under Section 188, employers should consider the risks of a rolling reference period being applied. If there is a risk that the number of redundancies will reach 20 using a rolling reference period then specific legal advice should be obtained about the applicability of the Marclean case.

For example, will the decision apply in cases where there is no allegation of a covert collective redundancy process?

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For specialist legal advice on collective consultations, please contact Michael Halsey in our Employment Law team on 07554 432829, or complete the form below.

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