Redundancy: reference period for collective consultation
UQ v Marclean Technologies SLU
In a collective redundancy situation, if the threshold number of dismissals is reached at any point across the 30- or 90-day period, consultation obligations apply in respect of those dismissals - and dismissals that occur before or after the given dismissal count towards the threshold.
The obligation to carry out collective consultation under the Collective Redundancies Directive (CRD) applies when a number of conditions are satisfied, including a condition regarding the number of dismissals that take place over a given period (of 30 or 90 days, depending on the choice made by each member state). UK legislation on collective redundancies (s. 188 of the Trade Union and Labour Relations (Consolidation) Act 1992) applies where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within any period of 90 days or less. Employers are then obliged then to consult with a recognised union or elected representatives, not make redundancies for 30 or 45 days depending on the numbers, and notify the Secretary of State using an HR1 form.
UQ was dismissed on 31 May 2018. In the period following her dismissal a further 36 people ceased working for her employer and she claimed that her dismissal formed part of a series of covert collective redundancies. Under Spanish law which implements the CRD, where an employer organises the timing of dismissals to avoid its legal obligations, any such dismissals can be declared null and void. In essence, the Spanish court asked the ECJ how, under the CRD, the period of 30/90 days should be measured. Must employers:
- only consider terminations of employment which took place in the 90 days prior to the date of the individual dismissal, or
- must they also consider terminations taking place in the 90 days after that date
when determining whether the threshold for collective consultation has been met?
The ECJ held that the reference period is the period of 30 or 90 days consecutive days which includes the relevant dismissal and which contains the greatest number of dismissals effected by the employer for one or more reasons not related to the worker. The applicability of the CRD protections is not determined by the subjective intention of the employer (as to how many redundancies it is proposing to make). All that is required is that the 30/90 days be consecutive and the worker in issue is dismissed within that period.
Link to judgment: https://www.bailii.org/eu/cases/EUECJ/2020/C30019.html
This is a problematic decision from the ECJ and looks certain to pose significant practical problems.
It would now appear that to work out whether a dismissal is subject to the collective consultation duty, employers will have to look both backwards and forward (over the relevant 90 days for the UK) to determine whether the threshold number of redundancies is met over the reference period. If the worker was dismissed within a consecutive 90-day period, however calculated, and the total number of redundancies within that period reaches the required threshold, the obligation to consult collectively will be triggered.
Arguably the decision does not take into account the very nature of the EU requirements as drafted in the CRD. Article 2 of the directive applies ‘where an employer is contemplating redundancies’ and in the UK, s. 188 of TULR(C)A 1992 states that consultation must take place where ‘an employer is proposing to dismiss …’ – in other words, both provisions are forward looking.
The decision of the ECJ in this case imposes consultation obligations in relation to a dismissal that has already taken place if that dismissal plus later dismissals would reach the threshold number. However, current UK case law confirms that if a dismissal has already been actioned and more redundancies are added in which were not proposed by the employer at the time of the first ones, there is no need to go back and consult with the employees again under collective consultation, but if they have not been actioned then they should now be included.