Pre-transfer consultation on collective redundancies
[ch 12: pages 468-469]One of the most troubling of the latest changes to TUPE for trade union reps was the introduction of a new statutory right to carry out pre-transfer consultation on collective redundancy dismissals. The new rules, in place since 31 January 2014, allow an incoming employer to start consulting with a transferor’s workforce on proposed redundancies before the transfer date, in other words, before becoming their employer. This “pre-transfer consultation” can count towards the minimum statutory period of 30/45 days’ collective redundancy consultation (see page 405).
Commentators, including the TUC, maintain that this change to the law breaches the Collective Redundancies Directive (1998/59/EC). The terms of that Directive are clear that collective redundancy consultation must be with the employer.
To bring this change into law, new sections 198(A) and (B) were added to TULRCA. The new rules allow collective redundancy consultation to be carried out by a transferee before the transfer date provided:
• there is, or is likely to be, a relevant transfer;
• the transferee proposes to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less; and
• at least one of the transferring employees “may be affected by the proposed dismissals or by measures taken in connection with the proposed dismissals”.
Under new sections 198(A) and (B), TULRCA:
• the transferee can elect whether to consult with representatives of employees of the transferor at risk of redundancy before the transfer date;
• the election must be by written notice to the transferor;
• any consultation can only take place with the transferor’s agreement;
• the transferor is entitled, but not obliged, “to provide information or other assistance” to the transferee to help it carry out pre-transfer consultation;
• the transferee is not allowed to rely on the transferor’s failure to provide information or assistance to justify any breach of the TULCRA information and consultation obligations; and
• a transferee can cancel a decision to carry out pre-transfer consultation at any time by written notice to the transferor, in which case, the slate is wiped clean and the pre-transfer consultation has no effect.
Employees and reps get no say as to whether pre-transfer consultation with the transferee takes place. However, reps should remember that any consultation must be genuine and meaningful if the employer is to avoid risking a protective award (see page 471). Given the practical limitations, meaningful collective consultation is likely to be difficult with a workforce that is not their own.
Even though a transferee can carry out pre-transfer consultation on proposed redundancies, it cannot carry out redundancy dismissals until after the transfer date.
Any dismissals by a transferor before the transfer date because of a transferee’s need to make redundancies will be automatically unfair (see page 484).
In practice, the new law is most likely to be used by incoming employers who operate out of a different geographical location, a significant distance away, where the nature of the job does not allow for alternative ways of working, such as home-working. The new pre-transfer consultation rules are likely to encourage transferees in this type of scenario to begin consultation before the transfer, with a view to carrying out redundancy dismissals of workers who cannot relocate as quickly as possible after the transfer date, so as to shorten the length of time they are required to pay their wages.
These new rules only affect collective, not individual, consultation. After the transfer, the transferee must still carry out proper individual redundancy consultation, consider alternative employment options and give full statutory or contractual notice of any dismissals, or else risk unfair dismissal claims (see Chapter 11).
A transferee who targets union reps or activists for redundancy will risk a claim for automatically unfair dismissal under section 105, ERA 96 and section 152, TULRCA (see Chapter 5).
A transferee who offers the incoming workforce any inducement to give up having their terms collectively bargained by their trade union risks multiple claims under section 145B, TULRCA (see Chapter 5).