Under Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992, employers that are proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less must consult appropriate representatives of employees who may be affected by the proposed dismissals. A recent decision of the Employment Appeal Tribunal (EAT) in a case concerning an employee who had been made redundant from his job at an international IT company provides useful clarification on when the obligation to consult arises.
The employee brought Employment Tribunal (ET) claims of unfair dismissal and for a protective award for failure to consult under Section 188. The ET concluded that there had been a proposal to dismiss more than 20 of the company’s employees within a 90-day period. In reaching that conclusion, it found that the company operated as the de facto employer for the group’s UK staff and that its UK operations were a single establishment. It also considered the decision of the Court of Justice of the European Union in UQ v Marclean Technologies, which it read as meaning that there is an obligation to look backwards as well as forwards, so that an employer that proposes fewer than 20 redundancies and then subsequently proposes further redundancies will be caught by the Section 188 obligations. The ET did not accept that the company had had a genuine and reasonable belief that the threshold numbers for triggering the duty under Section 188 had not been met, and concluded that there were no circumstances making it just to award less than the maximum 90-day protective award.
The unfair dismissal claim was also upheld. The company had unreasonably not considered placing the employee in a redundancy pool with a colleague, and the decision that his role was redundant had been been pre-determined, meaning that he could not adequately respond to it.
Allowing the company’s appeal against the finding that the obligation to consult under Section 188 had arisen, the EAT considered that the ET had misinterpreted Marclean. Marclean was not about when an employer is ‘contemplating collective redundancies’ within the meaning of Article 2(1) of Directive 98/59/EC, and therefore should not be read as affecting the interpretation of ‘proposing’ in Section 188. The focus of Section 188 was on whether the employer was at some stage ‘proposing’ collective redundancies in the future. The ET had also wrongly considered whether the company was operating as the de facto employer, instead of focusing on whether there was a contractual link between the company and the employees it was proposing to dismiss.
The EAT rejected the company’s argument that the ET had erred in making a 90-day protective award. The ET had been entitled not to accept the company’s mitigation that its failure to consult was based on a genuine belief that the Section 188 obligations did not arise, in the absence of evidence to show that the company had in fact held such a belief. The ET’s conclusions in respect of the unfair dismissal claim were also upheld.
The question of whether the obligation to consult under Section 188 had arisen was remitted to the same ET. If it found that the company had been in breach of Section 188, the ET would be allowed to reassess the level of the protective award.
