Collective Redundancies - Failure to Consult

The Employment Appeal Tribunal (EAT), in the case of Leicestershire City Council v UNISON, has upheld the decision of the Employment Tribunal (ET) that the Council’s obligation to consult with trade union representatives regarding collective redundancies, under the Trade Union and Labour Relations (Consolidated) Act 1992 (TULRCA), commenced when the practical decision to dismiss and rehire the workers was arrived at by Council Officers and not when the decision was made formal by a vote of the Council.

This decision is in line with that of the European Court of Justice (ECJ) in Junk v Wolfgang Kühnel that consultation of the required duration must take place before any employees are given redundancy notices. The ECJ ruled that consultation could not be meaningful, with a view to reaching an agreement, if the decision to dismiss employees had already been taken, effectively compromising the consultation process.

Leicestershire County Council had been undertaking a major staff evaluation programme in order to implement the national Single Status Agreement. By June 2002, most jobs had been evaluated but completing the process would involve renegotiating the terms and conditions of two groups of workers. The formal political decision to dismiss and re-engage these members of staff was taken on 12 December 2002. However, by this time the bulk of the work necessary to carry this out had already been done. Proposals to issue dismissal notices in January 2003 had been discussed at departmental level in mid-November 2002. On 20 December 2002, a consultation notice was sent to the UNISON branch secretary with a covering letter which merely invited her to ‘discuss the notice’.

UNISON claimed that the Council had failed to consult with them ‘in good time’ regarding the redundancies, and the claim was upheld by the ET. The union also applied for a protective award for both groups of workers. The ET followed principles for assessing the length of a protective award as set out in the case of Susie Radin v GMB, which confirmed that the duty to consult is an absolute obligation and that the consultation must be meaningful and undertaken with a view to reaching an agreement, not as an end in itself. The ET made an award of 90 days’ pay for the first group of workers and 20 days’ pay for the second group. The award was less in the latter case because the trade union had failed to respond to the Council’s invitation to consult.

The EAT judged that it could not interfere with the ET’s finding that not just a proposal but a decision to terminate the existing contracts of employment had been made in mid-November 2002. Following the judgment in Junk v Kühnel, the purpose of the legislation on consultation and redundancy is to avoid, or reduce the number of, terminations of contracts of employment. The achievement of that purpose would be put at risk if the consultation of workers’ representatives were to take place after the employer’s decision had been made.

Furthermore, the EAT held that it does not automatically follow that where the employer has partially complied with the requirement to provide information there should be a reduction in the protective award. The duty to provide information and the duty to consult are separate. The EAT therefore upheld the award of 90 days’ pay for the first group of workers. With regard to the second group, the EAT reduced the protective award to 10 days’ pay on the grounds that the Council’s attempts to negotiate with this group, after the decision to dismiss was ratified, were genuine albeit late and this was a mitigating factor.

The Department of Trade and Industry has issued new guidance giving information on the statutory redundancy consultation and notification provisions contained in TULRCA and explaining how these obligations fit in with new duties under the Information and Consultation of Employees Regulations 2004.