Collective redundancy consultation includes an obligation to consult on:
a) ways of avoiding redundancies; AND
b) the reasons for redundancy when there is a closure of a site.
(Decision by the EAT in UK Coal Mining Limited v (1)National Union of Mineworkers (2)British Association of Colliery Management ).
In circumstances of collective redundancy consultation, where there is a closure of a site, ensure that you consult with staff representatives in accordance with the above decision in order to avoid financial penalty.
(We recognise that many employers will already consult in this way. However, it is now recognised as a legal obligation).
In summary, when an employer is proposing to:
- dismiss as redundant 20 or more employees at one establishment;
- within a period of 90 days or less;
it needs to consult about the dismissals with appropriate representatives of the employees who may be affected.*
The obligation to consult has included a duty to consult on ways of avoiding redundancies since a change in the law in 1995. However, until now, there has been no corresponding duty to consult on the reasons for the dismissal.
The above recent EAT case has changed this position. The facts of this case are that:
UK Coal, the Respondent, decided to close its colliery resulting in 158 proposed redundancies. This triggered the duty to consult with the recognised trade unions about the dismissals. The Respondent did then carry out some consultation, including some consideration of opportunities for alternative employment and arrangements for calculating redundancy payments.
However, the employees' unions, the Claimants, challenged the adequacy of this consultation and brought a claim in the Employment Tribunal. The Claimants raised the issue, amongst others, of a failure to consult on the reasons for the closure of the colliery and, therefore, on the reasons for the redundancies.
The Employment Tribunal found, and the EAT agreed, that the Respondent was in breach of its obligations and awarded the maximum penalty (90 days pay per worker).
The EAT also held that there was an obligation on the Respondent to consult on the reasons for the closure of the colliery as, if this was not done, it would make meaningless the obligation to consult over ways of avoiding redundancies.