The Inner House of the Court of Session has agreed with the Employment Appeal Tribunal that the Employment Tribunal was wrong when it found that the expiry of fixed term contracts should be included when calculating the number of employees the employer was proposing to dismiss as redundant for collective consultation purposes (UCU v The University of Stirling).
The relevant legislation provides that an employer who is proposing to dismiss as redundant 20 or more employees at one establishment within a 90 day period has an obligation to collectively consult.
Redundancy (for the purposes of the relevant piece of legislation) is defined as "dismissal for a reason not related to the individual concerned". The Employment Tribunal found that the dismissal of an employee at the end of his fixed term contract fell within that definition. The Employment Appeal Tribunal and the Inner House of the Court of Session felt otherwise. All of the Claimants were employed on individual arrangements and had freely agreed to the fixed term nature of their appointments. Accordingly, it could not be said that dismissals were "not related to the individual concerned".
The impact of this case is tempered by the fact that the Government amended the relevant legislation with effect from April last year in order to expressly exclude the expiry of fixed term contracts from the "totting up" process for collective consultation purposes. If a fixed term employee is made redundant before the expiry of his fixed term contract, that termination will still be included in the calculation.
Although this development is positive for employers, there are several other potential hot spots that employers need to be conscious of when it comes to dealing with fixed term employees in a redundancy or re-structure exercise, particularly looking at the facts of each case. MacRoberts has considerable experience of dealing with these issues.
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The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
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