LRD guides and handbook May 2019

Law at Work 2019 - the trade union guide to employment law

Chapter 12

Pre-transfer consultation on collective redundancies 





[ch 12: pages 447-449]

One of the most troubling of the changes to TUPE made in January 2014 for union reps and negotiators was the introduction of a new statutory right to carry out pre-transfer consultation on collective redundancy dismissals. Since 31 January 2014, the law allows an incoming employer (the transferee) to begin consulting with a transferor’s workforce on proposed redundancies before the transfer date, in other words, before becoming their employer. This “pre-transfer consultation” can count towards the minimum statutory period of 30/45 days’ collective redundancy consultation (see page 390).
These new rules do not apply in Northern Ireland.



To bring this change into law, new sections 198(A) and (B) were added to TULRCA. The new rules allow collective redundancy consultation by a transferee before the transfer date provided:





• there is, or is likely to be, a relevant transfer;





• the transferee proposes to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less; and





• at least one of the transferring employees “may be affected by the proposed dismissals or by measures taken in connection with the proposed dismissals”.





Under sections 198(A) and (B), TULRCA:




• the transferee can decide whether to consult with representatives of employees of the transferor at risk of redundancy before the transfer date;





• that choice must be communicated in writing to the transferor;





• any consultation requires the transferor’s agreement;





• the transferor is entitled, but not obliged, “to provide information or other assistance” to the transferee to help it carry out pre-transfer consultation;





• the transferee is not allowed to rely on a transferor’s failure to provide information or assistance to justify any breach of TULRCA information and consultation obligations (see page 398); and




• a transferee can cancel a decision to conduct pre-transfer consultation at any time by written notice to the transferor, in which case, the slate is wiped clean and the pre-transfer consultation has no effect.





Employees and reps get no say as to whether pre-transfer consultation takes place. However, to avoid the risk of a substantial protective award, consultation must be genuine and meaningful. Achieving meaningful collective consultation with a workforce that is not their own (that is, before any change of employer) is likely to be very difficult, especially if the transferor has a recognised union (see Chapter 5).

Even though a transferee can carry out pre-transfer collective consultation on proposed redundancies, it cannot carry out redundancy dismissals until after the transfer. And for the avoidance of doubt, any dismissals by a transferor before the transfer date because of a transferee’s need to make redundancies will be automatically unfair (see page 462).

In practice, this new law is most likely to be used by incoming employers who operate out of a different geographical location a significant distance away, in cases where homeworking is not an option. The new pre-transfer consultation rules may encourage these transferees to start consultation before the transfer with a view to carrying out redundancy dismissals of those employees who cannot relocate as quickly as possible after the transfer date. Their aim will be to shorten the length of time they have to pay the wages of employees facing relocation redundancy.



These new rules only affect collective, not individual, consultation. After the transfer, the transferee must carry out proper individual redundancy consultation, consider alternative employment options and give full statutory or contractual notice of any dismissals, or else risk multiple unfair dismissal claims (see Chapter 11). 





A transferee who targets union reps or activists for redundancy will risk a claim for automatically unfair dismissal under section 105, ERA 96 and section 152, TULRCA (see Chapter 5).





Any transferee who makes an offer to the transferring workforce where the main purpose is to end the collective bargaining of their terms and conditions by their trade union risks multiple claims from union members for compensation under section 145B, TULRCA (see Chapter 5, page 149).