The case

In this case the ECJ considered whether a resignation, following a unilateral reduction of salary, was a "redundancy" and counted towards the numbers of redundancies required to trigger collective consultation obligations.

Facts

An employee resigned following her employer's unilateral reduction of her salary by 25%. Another employee, who had been made redundant, claimed that this resignation fell under the broad definition of "redundancy" used in relation to collective consultation obligations, and that, taking her resignation into account, collective consultation obligations had been triggered.

The ECJ said that, where there is a dismissal/resignation because an employer, unilaterally and to the detriment of the employee, makes significant changes to essential elements of his employment contract for reasons not related to the individual employee, this will fall within the definition of "redundancy".

What this means for employers

We already know that the definition of "redundancy" under European and UK law is wider than "redundancy" for the purposes of statutory redundancy. In particular, dismissals, combined with offers of re-engagement on new terms and conditions, trigger collective consultation obligations. Employers who are planning on imposing significant detrimental changes to terms and conditions should be aware that resulting constructive dismissals are likely to count towards numbers of redundancies in the 90 day period, and may unexpectedly trigger the obligation to consult collectively and to submit HR1 forms. Employers who are cutting pay to try to avoid redundancies might consider collectively consulting from the beginning of the process, to avoid unexpectedly falling foul of collective obligations.

Pujante Rivera v Gestora Clubs Dir SL and another (C-422/14), 11 November 2015