This week’s decision from the Court of Appeal in the Nolan case means that we will have to wait still longer for a ruling about the most basic of collective redundancies questions: when exactly should consultation start? To the disappointment of many, the Court of Appeal has decided that it needs yet another hearing to the answer to this question.

The dispute goes back to 2006 when the US government decided to close an army base in Hampshire. It did not consult with employee representatives before the final decision, even though by that time the resulting redundancies could not be avoided. The claimants argued that in the light of recent case law this was too late. The US government pointed to earlier case law which indicated that consultation about the consequences of a decision, rather than the decision itself, was sufficient.

These opposing positions reflect contrasting interpretations of our domestic legislation, which says consultation should begin “in good time” where an employer is “proposing” to make redundancies above the minimum threshold. Among other things this consultation should explore ways of avoiding the dismissals or reducing their numbers. The provisions are intended to implement the EU Collective Redundancies Directive which uses slightly different terminology.

When the dispute first reached the Court of Appeal in 2010, it decided to refer a number of questions about the interpretation of the Directive to the European Court of Justice. Last year the ECJ came back with its decision, which was to decline to answer the questions because the Directive did not apply to sovereign states.

When the Court of Appeal re-convened to decide what to do next, the US government inevitably argued that our domestic legislation should be interpreted in the same restricted way. In what will turn out to be the second of three decisions in this litigation, the Court of Appeal ruled that our collective redundancies legislation did extend to foreign states with employees in the UK. It was not unusual for domestic legislation to have a wider scope than the EU directive it was implementing, and in these circumstances the courts should not force its interpretation of UK legislation to make it as limited as the Directive.  

It added that the US government could have relied on the Sate Immunity Act at the outset of the proceedings and declined to submit to the jurisdiction of the employment tribunal, but it was not open to it to take that step at this late stage.

Now that the attempt to deliver a simple knock-out blow has failed, the Court of Appeal will have to hear detailed argument about whether the US military complied with the collective consultation requirements. The appeal hearing on this issue will now have to go ahead without the benefit of guidance from the ECJ. As Lord Justice Underhill says at the conclusion of his judgment, this is “regrettable” but it “cannot be helped”.

For employers this means more waiting for clear guidance about a crucial component of this legislation. They are having to get used to that, with a long wait in prospect for clarity on the numerical threshold too – see our blog posting from last month here. In the meantime, to play safe, they will need to start consultation as early as possible, and aggregate small scale redundancies across multiple sites when calculating the threshold of 20 proposed redundancies over a 90 day period.