Summary and implications

Earlier this week, the EAT reportedly reached a decision that turns on its head the law on employers' collective information and consultation duties.

You may recall that where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within 90 days, it must consult with appropriate representatives. This obligation has been in force for more than 20 years. And, a string of UK and EU judgments suggested that, under this duty, the number of proposed redundancies would normally be assessed in relation to each distinct site of the employer. As a result, it was understood that the duty is site-specific and is not triggered by the overall number of redundancies across a business as a whole. As you may recall, failure to comply with the duty to inform and consult can lead to a protective award of up to 90 days' actual pay, per affected employee.

The decision of the EAT in USDAW v WW Realisation 1 Ltd seems to challenge the validity of the "one establishment" condition embodied within section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992, as that condition has so far been interpreted. A written judgment has not yet been delivered, but we understand that:

  • the EAT has decided that the number of proposed redundancies has to be considered across the business as a whole - not per each distinct site / establishment. This means that the obligation to consult will arise a lot more frequently than previously understood to be the case;
  • the decision may also impact on the appointment of employee representatives, who may now have to be appointed across the business as a whole. This will be particularly complex where union/employee representation is not unified across the business as a whole; and
  • there is a risk that the judgment will apply retrospectively, as it is purporting to interpret the law as it has always been. It also appears that the judgment may not be appealed to the Court of Appeal.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.