The Advocate General ‘s opinion has been handed down in the case of US v Nolan. The AG’s opinion suggests that employers should not be compelled to consult over the strategic or operational business decisions themselves and specifically states that consultation would be premature if it was initiated even though no strategic or commercial decision had been taken. What is important, suggests the AG, is to know whether or not such a decision compels the employer to contemplate collective redundancies.

In April 2006, the civilian workforce of a US Army base in Hampshire were informed that the base would close at the end of September. Following consultation, around 200 employees, including Mrs Nolan, were given notice of dismissal on 30 June, and their employment terminated at the end of September. Mrs Nolan argued before an Employment Tribunal that the US had failed to comply fully with its collective consultation obligations because it had not consulted about the decision to close the base, or about avoiding mass redundancies. It had only consulted after those decisions had been taken. The tribunal agreed with her and ordered the US to pay each of the redundant employees 30 days pay.  The US appealed to the EAT and then to the Court of Appeal.

On appeal, the US argued that the collective consultation obligations only arise after the employer has made the decision to close the workplace and is accordingly proposing to dismiss the employees as redundant. The Court of Appeal decided that this point was unclear and it was unable to decide whether the consultation obligation arises

  1. 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
  2. only when that decision has actually been made and the employer is then proposing consequential redundancies. The Court concluded that it would only be able to decide the appeal with the benefit of further guidance from the CJEU.

The Advocate General is of the view that neither (i) or (ii) was the correct approach. The consultations would have been premature in (i) as no strategic or operational decision had been taken. On the other hand, the consultations would be late if the strategic decision had been made without leaving the employer any time to contemplate collective redundancies. The Advocate General’s opinion is that an employer’s obligation to consult arises when a strategic or commercial decision is taken which compels him to contemplate or plan for collective redundancies, it being for the UK to determine when that strategic decision is taken.

This particular case, as many others, is complicated by the fact that the decision on closure is taken by another entity, and that the employer itself did not come up with the idea of redundancies. Indeed redundancies are simply the inevitable consequence of a decision taken far above the employer’s head. The opinion specifically addresses that scenario and expresses the view that the duty to consult should not arise until the strategic or commercial decision which results in redundancies being contemplated has been taken by a body or entity which controls the employer.

The opinion is the pre-curser to the CJEU’s judgment. The Advocate General's role is that of independent advisor to the Court and though an opinion carries considerable weight, there are plenty of recent examples of the CJEU disagreeing with its Advocate General's views. The opinion is therefore persuasive at best. The CJEU will give its final ruling in the case later this year and we await the decision with interest.”

You can read the opinion here: C-583/10