Collective Redundancies – Cases coming along like buses

Two cases have been reported this week in respect of collective consultation for redundancies. Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 imposes an obligation on employers who propose to “dismiss as redundant” 20 or more employees at one establishment within a period of 90 days or less to consult with the representatives of any affected employees.

In University and College Union v The University of Stirling, the Supreme Court was concerned with whether the expiry and non-renewal of fixed term contracts fell within the scope of redundancy. The meaning of redundancy for the purposes of collective consultation is a dismissal “for a reason not connected to the individual concerned”.  The University made various redundancies and also dismissed many staff on the expiry of their fixed term contracts.  The departing fixed term employees were excluded from the collective consultation.  The Supreme Court found in favour of the employees to the effect that they should have been collectively consulted on the expiry of their fixed term contracts.   The University’s decision not to renew the fixed term contracts was because of business requirements and thus fell within the definition of redundancy (i.e. a reason not connected to the individual concerned).

The practical relevance of this decision is limited because since April 2013 legislation has specifically excluded employees dismissed on the expiry of fixed term contracts from the collective consultation requirements.

Turning to the second case which has been widely reported previously, the Court of Justice of the European Union (“CJEU”) has reached its decision in USDAW and another v VW Realisation 1 Ltd.  This case concerned the meaning of the expression “at one establishment” for the purposes of assessing if collective consultation is required.  The facts centred on the closure of various Woolworths and Ethel Austin stores across the country.  Did the employer require to collectively consult with employees at stores which employed fewer than 20 employees?  In other words, did the concept of “at one establishment” mean the aggregate of all of the employer’s employees across various stores, or was establishment specific to separate stores?

The CJEU has found that the term establishment refers to the workplace to which individuals were assigned (i.e. the individual stores) rather than the employer’s whole enterprise.  In other words, collective consultation was not required at separate stores which employed fewer than 20 employees.  The case will be remitted to the Court of Appeal to finalise its own decision.

Jack Boyle
Senior Solicitor – Employment Law