The Court of Appeal has asked the European Court of Justice of the European Union (ECJ) for clarification on the trigger point for collective redundancy consultation. The key issue is whether an employer has an obligation to consult with its employees about a proposed operational decision to close a workplace that would lead to redundancies, or whether the obligation to consult only arises after the employer has made the decision to dismiss the employees as redundant.

The facts of the case centred around the decision of the US Army to close an army base in the UK in 2006. On 24 March 2006 the workforce was informed that the base would close in September 2006. On 5 June 2006, a collective consultation was commenced. The closure resulted in 200 redundancies, including a Ms Nolan who brought a claim in the Employment Tribunal. Ms Nolan was successful in a claim for a protective award on the basis that the US Army had failed in its consultation obligations under s188 of the Trade Union and Labour Relations (Consolidation) Act 1992.

The USA appealed the decision to the Employment Appeal Tribunal, but was unsuccessful. The case was then referred to the Court of Appeal which has unanimously decided to refer the case to the ECJ for clarification on the trigger point for collective redundancy consultation. The Court of Appeal is seeking clarification on a long standing conflict between two differing decisions in this area.

On the one hand, the EAT in UK Coal Mining Ltd v National Union of Mineworkers (Northumberland Area) [2008] IRLR 4 held that an employer is obliged to consult with its workforce before making a decision to close a workplace, where that closure will inevitably lead to redundancies. On the other hand, the ECJ case of Akavan v Fujitsu [2009] IRLR 944 supports the conclusion that the duty only arises when the initial strategic business decision has actually been taken.

The ECJ’s decision should hopefully clarify the situation and will have practical implications for employers in terms of both the timing and the content of consultations.