In the recent case of UK Coal Mining Ltd v National Union of Mineworkers, the EAT has held that there is an obligation on employers to collectively consult over the reasons for a workplace closure where the closure will result in redundancy dismissals. In doing so, the EAT has departed from previous authorities on the scope of the duty to consult in a collective redundancy situation.
Section 188(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 (the “1992 Act”) provides that “where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals …”.
The Court of Appeal held that there was no obligation for employers to collectively consult about the reasons for the redundancies. This meant that where the closure of a business/workplace resulted in redundancies, there was no obligation to consult about the reasons for the closure. Instead, the obligation was to consult on how to carry out the redundancy programme.
Subsequently, in 1995, a new provision (s188(2)) was inserted into the 1992 Act requiring employers to consult about ways of (a) avoiding the dismissals; (b) reducing the numbers of employees to be dismissed; and (c) mitigating the consequences of the dismissals.
UK Coal owned a colliary in Northumberland which it decided to close, in 2005, on safety and economic grounds. Accordingly, UK Coal commenced consultation with the relevant recognised trade unions which subsequently brought a Tribunal claim for failure to consult.
The Tribunal found that there had only been consultation about issues such as alternative employment and redundancy packages. There had been no consultation about the decision to close the colliary or the timing of the redundancies. The Tribunal awarded the maximum protective award of 90 days’ pay per affected employee. UK Coal appealed to the EAT, including on the ground that there was in fact no duty to consult over the closure itself.
The EAT found that meaningful consultation about ways to avoid dismissals under section 188(2)(a) involves the parties consulting about the reasons for the dismissals. Where a workplace closure leads to dismissals, inevitably, there must be consultation about the reasons for that closure. The EAT held that in these circumstances, employers are obliged to consult about the reasons for the closure.
However, the EAT was clear that it is the proposed dismissals that are the subject of consultation, and not the closure itself. Accordingly, if an employer plans a closure but believes that redundancies can be avoided, there is no need to consult about the reasons for the closure (although this scenario will be rare).
What this means for employers
Where the closure of a workplace is likely to result in redundancies, an employer is now obliged to consult about the reasons for the closure.
In reality, most employers will already explain, to the relevant representatives, why a closure has been decided upon. However, following this case, the intention to close the site must be presented to representatives (and employees during any simultaneous individual consultation exercise) as a provisional intention to be consulted about and not a fait accompli.