Former Dell workers recently lost their High Court action alleging they were not properly informed and consulted regarding the collective redundancies in Dell’s plant in Limerick.

The employees were first informed about the proposed redundancies in writing and were provided with details of provisional leaving dates and proposed severance packages. On the same day as they received these details, the employees were briefed by senior management about the proposed redundancies. Dell subsequently engaged in a consultation and discussion process with its employees as required by legislation.

The employees brought a claim to the Employment Appeals Tribunal (EAT) alleging that the letter and meeting constituted a notice of dismissal and that any subsequent consultations were too late to be effective.

Dell contended that the consultations with employees subsequent to the letter were meaningful, worthwhile and effective. This was highlighted by the fact that a number of amendments were made to the proposals outlined in the letter as a result of the consultations, including a significant improvement to the severance packages at an additional cost to Dell of approximately €9 million.

The EAT decided that the letter was only an indication to the employees of the terms that would apply if they were made redundant and, accordingly, did not constitute a notice of dismissal. Therefore, the subsequent consultations were in compliance with Dell’s legal obligations.

The EAT’s decision was appealed to the High Court on a point of law.  The High Court dismissed the appeal on the grounds that no point of law had been identified which would provide a basis for overturning the EAT’s decision.

On examination of the facts, the High Court listed a number of reasons which supported the finding that the letter was not a communication of a final decision. These included:

  • A number of amendments were made to the letter’s content after it was first issued.
  • The letter provided that its contents were for information purposes only and did not constitute contractual terms or conditions.

The High Court acknowledged that on the one hand, the letter contained a significant amount of detail which did not suggest that Dell had an open mind about the collective redundancy proposals. However, on the other hand, it noted that if the letter was couched in generalities, it would be of little assistance to the employees and would not be well received.

This decision highlights the legal obligation of employers to engage in meaningful consultation with employees regarding proposed collective redundancies. Redundancies and, in particular, collective redundancies need to be undertaken very carefully in light of recent decisions and any discussions or correspondence issued during such consultations should be open to amendments and should not pre-determine any issues.