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Consultation must be “in good time”
Consultation must take place “in good time”. There is no precise definition, but there are minimum requirements:
• for proposals to dismiss as redundant 100 or more employees over a period of 90 days or less, made on or after 6 April 2013, consultation must begin at least 45 days before the first redundancy dismissal takes effect; and
• for proposals to dismiss as redundant 20 or more employees but fewer than 100 (again over a period of 90 days or less) the minimum consultation period is 30 days.
The cut in the consultation period from 90 to 45 days for dismissals of 100 or more employees became law on 6 April 2013 through the Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment) Order 2013. Unions fought the reduction in the minimum consultation term which, as TUC General secretary Frances O’Grady said, is “not going to create a single extra job”. Under transitional arrangements, any redundancies already proposed before 6 April 2013 remained subject to the 90 day consultation period.
These are minimum consultation periods. Sometimes longer consultation will be needed. Employers must not wait until the statutory clock starts ticking before launching consultation (Elkouil v Coney Island [2002] IRLR 174).
The duty to consult is triggered when the employer is proposing to dismiss employees as redundant. According to MSF v Refuge Assurance [2002] IRLR 324, this means that there is no statutory obligation to consult under TULRCA until the employer has formulated proposals to dismiss. Even so, consultation must happen while proposals are still at a formative stage, so that the union can exercise genuine influence over the outcome and has time to respond and make counter-suggestions (Amicus v Nissan Motor Manufacturing (UK) Limited [2005] EAT/0184/05).
In UK Coal Mining Limited v National Union of Mineworkers (Northumberland Area) and Another [2008] ICR 163, the EAT ruled that the obligation to consult collectively is triggered as soon as there is a clear (even though provisional) proposal, for example to close a plant, that would almost inevitably result in redundancies — as opposed to when a strategy that would lead to redundancies if implemented, such as closure, is merely “mooted as a possibility”. This, the EAT said, is an inevitable result of the statutory need to consult on “ways of avoiding dismissals” (section 188(2) TULRCA):
Ellington colliery in Northumberland was closed after water began to rise quickly at a coal seam. Two weeks later, management told NUM reps the mine needed urgent closure on safety and economic grounds. A report revealing that the water posed no safety risk was withheld from the union and 158 men were made redundant following minimal consultation on peripheral issues such as alternative employment opportunities and redundancy pay.
The EAT held that the employer’s duty to consult about ways of avoiding the dismissals inevitably meant engaging with the union about the underlying reasons for the dismissals. This, in turn, meant that the employer should have consulted with the union over the decision whether or not to close the mine in the first place.
A protective award of 90 days’ pay was awarded because the company deliberately set out to mislead the union as to the real reason for the dismissals, and engaged in limited consultation over marginal issues.
UK Coal Mining Limited v National Union of Mineworkers (Northumberland Area) and Another [2008] ICR 163
The effect of this case is that an employer must consult with unions on the economic reasons why redundancies are needed. Reps should be consulted early on any strategic decision-making that would lead to redundancies if implemented — and not just on implementing any redundancies that follow from the strategic decision.
An employer can still be “proposing redundancies” if redundancy is only one of various options, as in the case of Scotch Premier Meats v Burns [2000] IRLR 639, where the employer was uncertain whether to make redundancies, or alternatively to sell the business.
In some cases, reps also have rights to information and consultation about economic decisions likely to lead to changes in work organisation or contractual relations under the Information and Consultation of Employees Regulations 2004 (ICE).