The EAT has given guidance on various issues relating to collective redundancy consultation.  It has emphasised that where an employer elects to consult with existing employee representatives, it is important to look carefully at whether they have authority to consult on behalf of affected employees.  In addition, it is for employers to ensure that consultation actually takes place over the statutory topics, it is not enough to simply give employees the opportunity to raise issues.

Kelly and anor -v- The Hesley Group Ltd

Hesley proposed changing employees' terms and conditions by reducing hours, freezing salaries and lowering overtime rates, in order to save money.  It sought employees' agreement to these changes, and 96% accepted the new terms.  Hesley then commenced collective consultation concerning its proposal to dismiss and offer re-engagement on the new terms to the 32 employees who had not agreed to the variation.

Hesley chose to consult with its existing Joint Consultative Committee (JCC), an advisory body set up to communicate the views of staff to management and vice versa.  The JCC's constitution expressly stated that the body had no negotiating function.  In addition, although the constitution provided for the election or appointment of representatives to the JCC, Hesley's evidence was that it could co-opt people onto the committee "to ensure everyone has their voice heard".  

Two of the employee representatives brought claims, alleging that the consultation was defective in a number of respects.  Their claims were rejected by the Tribunal, and they appealed to the EAT.

Decision

The EAT rejected one ground of appeal, but allowed the others and remitted the matter to the Tribunal for further consideration.  Its findings were as follows:

When must consultation start?

In line with previous EAT authority, the EAT held that the obligation to consult arose when dismissals were "proposed", (i.e. once it was clear that some employees had rejected the offer of new terms and Hesley therefore proposed to dismiss them), not at the earlier stage when Hesley was "contemplating" dismissals, (i.e. when it became apparent that job losses might follow if any employees did not accept the new terms). 

Who are appropriate representatives?

The EAT held that the burden of proof was on the employer to show that the JCC members were appropriate representatives for the purposes of collective consultation.  It emphasised the need for the representatives to have been elected or appointed by the affected employees and to have authority from those employees to receive information and be consulted about the proposed dismissals on their behalf.  According to the EAT the central question was the authority of those appointed or elected.  The question of their authority is to be determined generally, but with particular regard to the purposes for and the method by which they were appointed or elected.  The EAT questioned whether members who had been co-opted to the JCC would have this authority.  It was also problematic that the JCC constitution said that it was not a negotiating body and might suggest that the JCC was simply a body whose purpose was the passive receipt of information, rather than one which would have authority to consult with a view to reaching agreement.

Subject matter of consultation

The EAT underlined the importance of strict adherence to the collective redundancy consultation rules and held that the employer has a positive duty to ensure that there is consultation on all three issues listed in TULRCA, (ways of avoiding the dismissals, reducing the number of employees to be dismissed and mitigating the consequences of the dismissals).  If these matters are not raised by the employee representatives, the employer must do so.  It is not sufficient to offer employees the opportunity of discussing matters of concern to them. 

Content of information letter to employee representatives

On a similar note, the EAT emphasised that all of the information about the proposed dismissals required by TULRCA must be set out in the employer's written communications with employee representatives.  It is not sufficient to say that this can be inferred from verbal discussions.

Comment

Employers who are planning to consult with an existing employee representative body should consider in advance whether that body has the appropriate authority from the affected employees, especially where it has not previously been involved in collective consultation and/or its constitution does not expressly give it the power to do so. 

During consultation, it is important to ensure that all of the statutory information is provided and that all of the statutory topics for consultation are specifically raised with employee representatives.  The minutes of the meetings with employee representatives should reflect that the requirements of TULRCA as to the form of the consultation and the matters for discussion have been met.