This week the Court of Appeal has admitted that it just does not know when consultation should start to comply with the law on collective redundancies. This ruling comes in a dispute between the US Government and about 200 employees who were made redundant when a US army base in Hampshire was closed. The main issue it was asked to decide was whether collective consultation on redundancies should have started at the point when closure of the base was being actively considered, or whether the obligation was only triggered once the decision to close it had actually been taken.
Both sides of the dispute took opposing positions, and in order to resolve it the Court of Appeal needed to interpret last year’s decision of the European Court of Justice in the Akavan case. That case is the latest word from the ECJ about the timing of consultation stipulated by the Collective Redundancies Directive, with which the corresponding UK law must comply. The trouble was that the Court of Appeal could not decide what it meant, since it could find support for both sides’ arguments in different passages in that judgment. It therefore thought the only solution was to make a reference to the ECJ in the hope of clarifying the law.
The underling problem is that the wording in our domestic legislation – which imposes an obligation to consult when an employer is “proposing to dismiss” 20 or more staff as redundant within 90 days – leaves much open to interpretation. The same is true of the Directive, where the corresponding expression is “contemplating collective redundancies”. In recent years our domestic courts have moved to a stricter interpretation of these provisions, with an emphasis on requiring employers to consult before a decision is taken which makes redundancies inevitable. It may be that the reference now being made will clear things up. But that will take time, and meanwhile the message to employers wishing to play safe remains the same: the earlier you start consultation the better.