The European Court of Justice (“ECJ”) has decided against providing guidance on the correct trigger point for collective consultation where an employer wished to make twenty or more employees redundant.
The case concerns a claim by Ms Nolan, a civilian employee on a US military base in the UK, who claimed that she had not been consulted early enough when a decision to close the base, which led to her redundancy, was made.
The Court of Appeal sought clarity from the ECJ on when the trigger point for collective consultations should have begun and the correct interpretation of the European Collective Redundancies Directive (“the Directive”).
The ECJ was asked whether an employer’s obligation to consult about collective redundancies, pursuant to the Directive, arises:
- When the employer is proposing, but has not yet made, a strategic business or operational decision that will foreseeably or inevitably lead to collective redundancies; or
- Only when that decision has actually been made and he is then proposing consequential redundancies.
The ECJ decided that it could not give a ruling because Ms Nolan’s dismissal falls outside the scope of the Directive on the basis that her dismissal was an act of public authority resulting from an administrative reorganisation.
ECJ held that Ms Nolan fell within the express exclusion contained in the Directive covering those employed by public administrative bodies or by establishments governed by public law, such as a US military base in the UK.
The current position
The ECJ’s failure to clarify the position means that there are now inconsistencies between UK and EU case law in relation to the trigger point for collective consultation.
In the UK, the UK Coal Mining case held that collective consultation should begin once closure of the establishment is proposed (when proposals are at a formative stage), meaning employers have to consult on the actual decision to close the site, as opposed to only on the consequential redundancies.
However, at European level the Akavan case decided that the trigger point arises when the employer has actually formed an intention to make employees redundant.
The latter is obviously more favourable to employers as the obligation to consult kicks in later in the decision process.
Impact on employers
For the time being, UK Coal Mining will continue to apply. Nevertheless, the ECJ has left us with uncertainty as to what the trigger point for collective redundancy should be.
To view Clarklegal’s survey on the Government’s Consultation on changes to the collective redundancies rules, please click here.