UK: Redundancy - Consultation

Last Updated: 22 December 2010
Article by Bird & Bird's Labour & Employment Group

Starting Date for Collective Consultation

In the recent case of USA v Nolan the Court of Appeal has asked the European Court of Justice (ECJ) to clarify the terms of the EU Directive that requires employers to consult with the workforce 'in good time' when contemplating collective redundancies.

The question is whether it is necessary for the employer to consult about the strategic business decision that may lead to redundancies (e.g. the reason for closure of a particular workplace) or whether the obligation to consult only arises once that decision has been taken and redundancies are inevitable, so that there can be no consultation about the decision itself.

The decision in the leading case of UK Coal Mining is clear that 'where closure and dismissals are inextricably intertwined, the duty to consult over the reasons [for the closure] arises.'

However, the ECJ has recently suggested, in the Fujitsu Siemens case, that the duty to consult the workforce only arises once the strategic or commercial decision that compels the employer to contemplate or plan collective redundancies has been taken.

Points to Note –

  • We shall keep you informed of developments but, in the meantime, we shall be happy to advise as to the circumstances in which the obligation to consult in respect of collective redundancies arises. We suggest that, in cases of workplace closure, employers should assume that they may be required to disclose and consult upon the reasons for the closure as well as any contemplated redundancies.
  • One point that definitely emerges from the facts in the Nolan case is that, in any event, employers should try and make sure that there is as little delay as possible between the decision to close a workplace and the start of consultation with employees. In this case, the gap, from late March/early April 2006 and early June in the same year was considered to be too long.

* * * * * * * * * *

Fair Consultation Over Scoring in Selection Process

In Pinewood Repro t/a County Print v Page the applicant employee claimed that it was unfair of his employer not to explain to him why he had received lower marks than the two other people in his 'pool' for redundancy.

There was no doubt that there was a redundancy situation.

A 'pool' of three employees was identified and they were scored on matters such as their attendance, skills, experience and disciplinary records.

The claimant was shown the scores for all three but they were not explained to him. When questioned by the claimant about the scores, the employer simply said that they were 'reasonable and appropriate' and made no comment on the particular queries raised by the claimant.

The employment tribunal thought this was insufficient and that the employer should have explained to the claimant why he had received the scores he did. The employer appealed to the EAT which said that, although it was not necessary in every case, in this instance it was – because there were only three employees involved, the marking was very close and the questions related to scoring against a subjective criterion ("flexibility"). It was also relevant that the claimant's scoring sheet had contained no comments whatsoever in relation to the scores given.

Point to Note –

  • The EAT said that it is for an employment tribunal to decide, in each case, whether the employee has been given a fair and proper opportunity, and sufficient information, to understand and be able to challenge the scores given to him/her in a redundancy exercise. Where performance-related scores are based on previous appraisals, much of this information should already be available to the employee. Where they are not, it is unlikely to be sufficient simply to provide the employee with his or her scores, without further explanation of how they were arrived at.

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