Collective Consultation in good time

17 February 2006

Warren Wayne, Ian Hunter

Following on from our highlighted case last month, the Employment Appeal Tribunal has again considered the obligation to inform and consult over collective redundancies. It has now found that it did not matter that consultation began only days before a deadline for employees to decide whether to sign new contracts or accept redundancy. The key issue, they said, is that consultation need only be 'sufficient for fair consultation to take place working back from the first date for dismissal' for it to be 'in good time'.

Where an employer is proposing to make 20 or more employees redundant within a period of 90 days or less, it must consult with appropriate representatives of the affected employees (section 188 TULR(C)A 1992). In addition to the specific obligation to consult at least 30 or 90 days (depending on the numbers affected) before the first of the dismissals takes effect, there is also a general obligation to begin consultation 'in good time'. Consultation must be meaningful and include consultation about ways of avoiding dismissals and reducing the number of employees to be dismissed, as well as mitigating the consequences of the dismissals. Failure to consult will result in liability to pay a protective award of up to 90 days' pay to every affected employee.

In Amicus v Nissan Motoring Manufacturing (UK) Ltd, the employer was a motor manufacturer based in Sunderland. In 2003 it proposed relocating 62 employees to new premises in Bedfordshire, with effect from 1 June 2004. The company began consultations with the 'company council', a body of 10 employee representatives elected by the workforce to negotiate issues such as pay and terms and conditions, on 1 October 2003 and gave employees until the end of January 2004 to decide whether or not to relocate. The employer did not meet formally with Amicus, the recognised trade union, until 19 January 2004, only three weeks before the employees had to make up their minds.

The EAT held that although the consultation with representatives before 19 January 2004 did not satisfy the requirements of s 188, the consultations with Amicus in January were still 'in good time' as they took place four and a half months before the first dismissals were to take effect. The EAT said that 'in good time' means in enough time to be effective, so that the aims of avoiding dismissals, reducing the numbers dismissed and mitigating the consequences of dismissals were achievable. They also confirmed that s 188 should be interpreted in light of the changes made by Council Directive 92/56/EC, which replaced the requirement that consultation start 'as soon as possible' with 'in good time with a view to reaching agreement'.

In this case, although consultation with the union took place over a short timescale, it still occurred at a time when the proposals were at a formative stage, allowing the unions to suggest significant improvements. The EAT's message in this case is to avoid a calendar-driven approach to the consultation and to place more emphasis on whether the consultation achieves the aims set out in s 188. Even if undertaken late in the day, effective and meaningful consultation may not be out of time, and could be a worthwhile exercise capable of correcting previous breach or non-observance of s 188.

If you would like any further information in relation to this or any other employment issue, please contact Ian Hunter, Tel: 020 7415 6140 or Warren Wayne, Tel: 020 7905 6230

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