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).

Although section 188 contains an “establishment” test, a landmark decision in a claim brought by USDAW, USDAW v Ethel Austin Limited and Woolworths (in administration) [2013] UKEAT/0547/12/KN, has decided that the establishment test is a breach of European law. The issue has been referred to the European Court of Justice (ECJ). (See page 326: No more establishment test?).

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”. The implications of this wider definition are discussed below.

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

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 the dismissals.