Employers should look out for collective redundancies in situations where they do not at first seem necessary
Changing employees’ terms and conditions of employment can be problematic enough at the best of times. Managers must tread carefully to ensure that if, as a last resort, they have to dismiss employees who object to the change, such dismissals will be viewed as fair for “some other substantial reason”.
The case of GMB v Man Truck & Bus UK serves as a timely reminder that there are even more considerations to be born in mind when the changes to terms and conditions might affect 20 or more staff at one establishment. In those circumstances, if it had to dismiss enough dissenting employees the business would be obliged to comply with the collective consultation requirements found in TULR(C)A s188.
In GMB the company undertook the harmonisation of two sets of employment terms by giving all the staff notice to terminate their existing employment and offering to re-engage them on new contracts. The recognised union complained that the company had failed to enter into collective consultation with it.
The requirement to enter into collective consultation is triggered by an employer proposing to “dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less.” The catch is that “dismiss as redundant” is defined as dismissing for a reason not related to the individual concerned. This includes dismissals motivated by a desire to change conditions of employment.
Man Truck was found to have dismissed “as redundant” its staff, even though they all continued working under the new employment contracts offered. They might not have left its service, but their employment under one contract had come to an end, which amounted to a dismissal.
The duty to consult collectively in these circumstances falls on all businesses, not just those that recognise a union. If no union is recognised, the duty is to consult with employee representatives.
There is no obligation to consult if a company succeeds in persuading its staff voluntarily to accept contractual changes, without proposing to dismiss those who will not agree.
The obligation to collectively consult also arose unexpectedly in Scotch Premier Meat v Burns. Here the company concluded that it would either have to sell the business as a going concern or close down and make all the staff redundant.
The EAT found that the obligation to collectively consult was triggered as soon as the company determined that it had two possible alternatives, one of which involved dismissals. It was irrelevant that the option of selling the business as a going concern was still being considered.
The company subsequently offered voluntary redundancy to the staff. The EAT also found that employees who volunteered for redundancy could be viewed as having been dismissed. This meant that they were entitled to protective awards because of the failure to consult collectively, just like staff who were made compulsorily redundant.
This indicates that employees could also be entitled to bring unfair dismissal claims even if they volunteered for redundancy.
- Collective consultation is required for any dismissals which are not related to the individual concerned, as well for redundancy dismissals.
- It can apply in the case of changing employment conditions.
- It can arise if dismissal is only one option being considered.
- Voluntary redundancies can amount to dismissals.
By Jill Kelly, a partner at Tunbridge Wells law firm Thomson Snell & Passmore