Large-scale redundancy exercises, like the one recently announced at Vauxhall’s Ellesmere Port plant in Cheshire, can easily be viewed as cost-saving measures that are inevitable in the face of Brexit and concerns over the manufacturing future of the country.
However, any redundancy exercise involving 20 or more employees being made redundant in a period of 90 days has the benefit of strict legal protection under the Trade Union and Labour Relations (Consolidation) Act 1992.
So when mass redundancies occur the law can step in to ensure the employer examines whether there are ways to avoid dismissals, and also whether the blow of any unavoidable dismissals can be softened.
However, there is an argument that the current domestic law contained in the Trade Union and Labour Relations (Consolidation) Act 1992, fails to correctly implement the Collective Redundancies Directive (98/59/EC), which is part of European law. In the case of Junk v Kühnel, the European Court of Justice held that the phrase consultation “with a view to reaching an agreement” imposes an obligation on the employer to negotiate.
On the other hand, English courts have read “consultation” as amounting to a weaker right that demands something less than negotiations, and is closer to the employer providing information.
Despite the weaker approach under English law, the courts have been clear that consultation has to be genuine and that an employer does not comply if, before meeting the appropriate representatives, they have already made their mind up that there are going to be redundancy dismissals.
Failure to consult in line with the law leads to a protective award – a sum of compensation for the failure to consult. This award is calculated as a number of days’ pay, up to a maximum of 90 days.
If you are faced with a mass redundancy situation, you should first contact your trade union or employee representative. It is important that you scrutinise the reasons given for the redundancies, and think carefully about whether there may be any way to avoid the redundancies entirely, or to reduce the number of people affected.
Making sure you have accurate information is also often key:
- reasons for the proposals
- the numbers and descriptions of employees it is proposed to dismiss
- the total number of employees of any such description employed at the establishment
- the way in which employees will be selected for redundancy
- how the dismissals are to be carried out
- the method of calculating the amount of redundancy payments
- agency workers: the numbers, where they are working and the type of work they are doing