Consultation – When, Not If

It’s all go in the world of collective redundancy consultation. Following on from the European Woolworths decision in May (reported here), there has been a further case concerning when the obligation to collectively consult may be triggered. As mentioned in our Woolworths report, if an employer is proposing to make 20 or more employees redundant at one establishment in a 90 day period, there is a requirement to collectively consult with those employees for a period of at least 30 days before terminating employment. Rather than considering what an “establishment” is, the present case focused on the issue of when an employer may be “proposing” to make redundancies in this context.

In E Ivor Hughes Educational Foundation v Morris, the employer, a school, decided at a meeting on 27th February 2013 to close the school unless admission numbers increased. At the end of April 2013, when pupil numbers for the 2013/2014 academic year were known to have not increased sufficiently, the employer decided to close the school. All employees, including Miss Morris, were dismissed as redundant when the school was closed without any consultation being carried out at all. Miss Morris and other Claimants claimed that there had been a failure on the part of the employer to consult collectively, thus attracting an award of 13 weeks’ pay per employee.

In order to establish whether there had been a failure to collectively consult and the extent of that failure, it was necessary for the Tribunal to establish when the obligation arose, namely when was the employer “proposing” to dismiss these employees as redundant. The law in this area is not particularly clear and there is conflicting case law. At the moment, collective consultation obligations arise either:

  • when the employer is proposing, but has not yet made, a strategic business or operational decision that will foreseeably or inevitably lead to collective redundancies; or
  • only when that decision has actually been made and the employer is then proposing consequential redundancies.

Each approach has a slightly different start point for any consultation obligations, with the former potentially triggering them at an earlier stage.

The Tribunal took the view that the employer had decided at the meeting on 27th February 2013 that the school would be closed in April unless numbers improved and that the governors considered it unlikely that numbers would improve. The Tribunal decided that this satisfied both of the above-mentioned tests and that the obligation to collectively consult was triggered on 27th February rather than when the school was actually closed at the end of April 2013. On appeal, the Employment Appeal Tribunal (EAT) agreed with the Tribunal.

This is an important decision illustrating when the obligation to collectively consult may be triggered. An employer may be deemed to be proposing to make redundancies if they have a conditional view that redundancies may have to be made in the future if certain likely events were to occur. If collective consultation is started too late this could result in a breach of consultation obligations, leading to possible protective awards and unfair dismissal claims for failing to consult fully and meaningfully.

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James Tamm

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