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).



Under section 188, TULRCA, to trigger the duty to consult collectively, the 20 or more employees at risk of redundancy 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. It does not matter that the unit does not have a management capable of carrying out collective redundancies, or that the unit is not a separate legal entity, although 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 after the collapse of high street retailer Woolworths, when the administrator managing the collapse refused to pay protective awards for 4,500 shopworkers at Woolworth stores because the stores employed fewer than 20 employees.


As Usdaw pointed out to the ECJ, the ruling means that workers based at smaller business units (such as smaller high street retail units, as in the Woolworths example, or bank branches) have weaker statutory consultation rights in the event of redundancy than their colleagues who are based at larger units, even though they all share the same employer and face all the same redundancy concerns. The ECJ rejected Usdaw’s argument that workers should have the right to collective consultation whenever 20 or more employees who share 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 TULRCA provisions on collective redundancies do not apply to Crown employees (those working for a government department or carrying out its functions). However, civil servants have consultation rights under their civil service redundancy policy. 



The definition of redundancy dismissal for the purposes of collective consultation is wider than the statutory definition for individual redundancies in section 139, ERA 96, set out at the start of this chapter. The duty to consult collectively will be triggered by any “dismissal for a reason not related to the individual concerned”. 



Even if there is no statutory duty to consult over collective redundancies because fewer than 20 employees are affected, there must be individual consultation of those at risk. A failure to consult an individual at risk of redundancy can make the dismissal unfair (see Chapter 10: Dismissal).


The employer’s statutory duty is to consult collectively in good time about ways of avoiding dismissals, reducing the number of employees to be dismissed, and mitigating the consequences of dismissals (see page 411).