Collective redundancy consultation 





An employer has a legal duty to consult over collective redundancies if it proposes to dismiss as redundant 20 or more employees at one establishment within a 90-day period. This law is set out in Chapter II (section 188 onwards) of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA). In Northern Ireland collective consultation rules are contained in Part XIII of the Employment Rights (Northern Ireland) Order 1996 (article 216 onwards). 


The obligation to consult collectively, and the penalty for breach of the obligation (a protective award) derives from EU law — the Collective Redundancies Directive. As such, these laws are at risk of being changed or diluted after Brexit (see the box on pages 18-21, Chapter 1). 




To trigger the duty to consult collectively, 20 or more employees “at risk” of redundancy must all work at one establishment.
The European Court of Justice (ECJ) has ruled that “establishment” means the business unit where employees are assigned to work. It does not need to have its own management capable of carrying out collective redundancies, or be a separate legal entity, but it must be a distinct and stable entity with its own workforce.





This is the unsatisfactory conclusion of legal proceedings fought by retail union Usdaw following the collapse of high street retailer Woolworths. Usdaw claimed protective awards for 4,500 shop workers who were denied an award because the Woolworth store where they worked had fewer than 20 employees.




As Usdaw argued before the ECJ, the result of this ruling is that employees at smaller business units, such as smaller high street retail or bank branches, have weaker statutory redundancy consultation rights than their colleagues at larger units, even though they all share the same employer and face the same redundancy concerns, simply because the branch or store where they work happens to be smaller. The ECJ rejected Usdaw’s argument that workers should have the right to be consulted collectively whenever 20 or more employees sharing the same employer are at risk of redundancy, no matter where they work (Usdaw v (1) WW Realisation 1 Limited (in liquidation) (Woolworths); and (2) Ethel Austin Limited, Secretary of State for Business Information and Skills Intervening, Case C-80/14 [2013] IRLR 686).



The Woolworths ruling was followed in Seahorse Maritime Limited v Nautilus International [2018] EWCA Civ 2789, which involved proposed redundancies across a group of stationary supply ships. Nautilus members lost the right to be consulted collectively through their union when the Court of Appeal ruled that each ship was a separate “establishment”. Since fewer than 20 redundancies were proposed on each ship, the duty to consult collectively was not triggered. 




The employer’s statutory duty is to consult collectively in good time about ways of avoiding dismissals, reducing their number and mitigating their consequences (see page 392).




The right of recognised union to be consulted collectively over redundancies is an aspect of the human right to freedom of association and to join trade unions under Article 11, European Convention on Human Rights. This was established in Vining v London Borough of Wandsworth [2017] EWCA Civ. 1092, an important ruling supported by UNISON. The judgment describes consultation about mass redundancies as “a paradigm example of a matter affecting members’ interests”.