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Collective consultation: counting dismissals
Employers do not have to consider past dismissals when deciding whether the threshold to trigger collective redundancy consultation obligations has been reached.
Towards the end of the Brexit transition period, an ECJ decision - UQ v Marclean Technologies SLU – appeared to say that when deciding if a dismissal is part of a collective redundancy programme, an employer must consider all dismissals within the period of 90 consecutive days within which an individual dismissal occurred. As a result of the timing, Marclean is binding on the UK.
In this case, the EAT had to carefully examine what had actually been decided by Marclean, remembering that Marclean was decided under Spanish law where the trigger for collective consultations is the number of actual terminations, not those that are contemplated and that the comments made by the Advocate General’s Opinion in that case (made ahead of the decision by the CJEU and which appeared to suggest going back in time to look at those effected) were neither picked up nor followed by the ECJ in its decision.
Background
Mr Mildenhall worked for MF, a large international IT company, until he was dismissed for redundancy. He brought tribunal claims for unfair dismissal and for a protective award under TULCRA, s.188.
The tribunal held that, in light of Marclean, an employer who proposes fewer than the threshold number of dismissals within 90 days is subject to the s. 188 obligation to consult if it subsequently proposes additional dismissals within a period of 90 days that take the total number of employees to be dismissed to 20 or more.
The tribunal also held that MF operated as the ‘de facto’ employer of the employees it proposed to dismiss for the purposes of s. 188 and made a protective award of 90 days’ pay.
MF appealed, arguing that Marclean did not entitle the tribunal to look backwards as well as forwards when assessing whether an employer had made a proposal sufficient to trigger the s. 188 thresholds. It also erred, argued MF, by treating MF as the de facto employer of all UK staff and thus it shouldn’t have aggregated individuals who were employed by discrete legal entities.
EAT decision
The appeal was allowed.
Properly analysed, Marclean was not about whether an employer was ‘contemplating’ dismissals but about the meaning and interpretation of what was meant by ‘collective redundancies’. The ECJ’s case law on ‘contemplating collective redundancies’ shows that is a distinct and necessary requirement to trigger the obligations under the Directive, requiring a focus on what the employer contemplated or planned at the time for the future. If the ECJ in Marclean intended to replace this requirement for triggering the duty, and the associated case law of the ECJ addressing it, with a new test based on an objective assessment of how many dismissals in fact are effected within a relevant period, it would have said so. Consequently, Marclean it did not affect the proper interpretation of ‘proposing’ in s.188.
The focus of these provisions is on what the employer is proposing for the future. So, if an employer proposes 10 redundancies only and then two months later proposes another tranche of just 10 redundancies, it was not necessarily at any point proposing to make 20 redundancies within 90 days (subject to any evidence to the contrary of course, which shows that the employer was deliberately staggering them).
As to the tribunal’s conclusion that MF was the de facto employer, the EAT said that the s. 188 duty is owed by an employer to those who have a contract of employment with it. The tribunal therefore erred in considering that the s. 188 thresholds were met because MF acted as the de facto employer for all UK staff when there was evidence that some of those individuals were or may have been employed by discrete legal entities.
Comment
This is case gives helpful clarity on the question of the trigger point in collective redundances, with Marclean having caused significant concern that tribunals would (as it did in this case) retrospectively go back and see how many redundancies had already been made.
It is now clear that the law remains as we have all understood it for many years: it looks to whether the employer is ‘proposing’ to dismiss as redundant 20 or more employees within 90 days (irrespective of how many are actually dismissed) and this is a necessarily prospective question based on the employer’s plans. The employer must start those consultations ‘once a strategic or commercial decision compelling him to contemplate or to plan for collective redundancies has been taken’ (Akavan Erityisalojen Keskusliito v Fujitsu Siemens Computers Oy [2010] ICR 444).