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 the same rules are contained in Part XIII of the Employment Rights (Northern Ireland) Order 1996 (article 216 onwards). The obligation to consult collectively, and to pay a protective award if consultation is not carried out or is inadequate, derives from EU law — the Collective Redundancies Directive. 



To trigger the duty to consult collectively, the 20 or more “at risk” employees must all work at one establishment.
The European Court of Justice (ECJ) has ruled that “establishment” in this context refers to the business unit where employees are assigned to work. The unit does not need to have its own management capable of carrying out collective redundancies, or to 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 brought a tribunal claim for 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, the result of this ruling is that employees at smaller business units (such as smaller high street retail units, 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 exactly the same redundancy concerns, just 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 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 377).



In an important new ruling in a claim supported by UNISON, Vining v London Borough of Wandsworth [2017] EWCA Civ. 1092, the Court of Appeal has confirmed that the statutory right of a recognised union to be consulted collectively over redundancies is an aspect of the human right to freedom of association and to join trade unions (Article 11, European Convention on Human Rights, see Chapter 1). The judgment describes consultation about mass redundancies as “a paradigm example of a matter affecting members’ interests”.