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Dismissing employees and offering to re-engage them on new reduced terms and conditions
It was confirmed in GMB v Man Truck and Bus UK Ltd EAT/971/99 [2000] IRLR 636, that proposals to dismiss 20 or more employees within a 90 day period and to re-engage them on new terms and conditions will trigger the obligation to consult collectively.
The tactic of mass dismissal and re-engagement of staff has been a feature of the economic downturn, used to cut the terms and conditions of thousands of workers in both the public and the private sector. Research by the GMB has shown that by April 2011, 171,709 posts were under threat or had already been eliminated using this tactic at 331 local authorities across England, Wales and Scotland.
Failure to consult adequately before issuing notice to end contracts of employment and offering new terms will result in liability for a protective award:
As a result of the introduction of the local government “single status” agreement at Leicestershire County Council, hundreds of employees were dismissed and re-engaged on less favourable terms, triggering a statutory obligation on the council to consult with the union. Although there had been discussions with the union at an earlier stage, the employer had broken them off, and for one group of employees, there had been no consultation at all on the issues surrounding the dismissal and re-engagement before the decision to dismiss and simultaneously offer new worsened terms was announced at a meeting. The Court of Appeal upheld the tribunal’s award of the maximum 90-day protective award.
UNISON v Leicestershire County Council [2006] EWCA Civ 825