Do you want the good news or the bad news?
Employers need to be aware of some changes to the collective consultation rules that have been made in the last few months. Some of the changes are beneficial to employers; one is not.
The statutory obligation to collectively consult is triggered when an employer is proposing to dismiss 20 or more employees at one establishment within a 90 day period. Employers will need to discuss their plans with appropriate representatives of the affected employees before dismissing staff, and must notify the government of their plans to ensure that local job centres are alerted to the impending redundancies.
When calculating the number of employees being dismissed in the 90 day period, an employer no longer needs to count employees on fixed term contracts “which have reached their agreed termination point” when considering whether the threshold is reached.
In addition, when an employer is proposing to dismiss 100 or more employees at one establishment within a 90 day period, the minimum consultation period before the first redundancy can take effect has been reduced from 90 to 45 days. The period in which an employer is required to lodge an HR1 form (notifying the Secretary of State of the proposed redundancies) has also been reduced to 45 days.
While these changes will benefit employers, a recent decision of the Employment Appeal Tribunal has potentially widened the scope of the collective consultation rules. The Trade Union and Labour Relations (Consolidation) Act 1992 states that the collective consultation rules are triggered when an employer proposes to dismiss 20 or more employees at one establishment. Usually, different geographical sites will be counted as separate establishments.
However, in the case of USDAW and others v WW Realisation 1 Ltd (in Liquidation) and another (which arose out of the closure of the retail chain Woolworths) the Employment Appeal Tribunal has decided that the wording in the 1992 Act “at one establishment” is not compatible with the European directive that the statute is intended to implement, and so should be disregarded. This represents a significant change as businesses will need to consider employees being made redundant within their business as a whole, rather than for example on different sites. This means that the obligation to collectively consult may now be triggered in circumstances where previously it would not have been.
This could well cause uncertainty and potentially widen the net of collective consultation significantly, especially for employers who have a number of branches or are spread over different locations.