European opinion leads to confusion over collective redundancy consultation rules

The question of when employers are obliged to start consulting on collective redundancies remains unanswered after the Advocate General’s opinion on the issue in the case of United States of America v Nolan.

The case concerned whether or not the US was in breach of its collective consultation obligations regarding around 200 civilian employees after it decided, in March 2006, to close an army base in the UK by the end of September that year.

The issue in this case is important for employers because, if they fail to comply with their obligation to consult on collective redundancies, they may end up paying a protective award of up to 90 days’ pay to all affected employees.

A claim was brought on behalf of the affected employees for protective awards, arguing that the US should have consulted them on the decision to close the base, at least before consultation eventually began on 5 June 2006.

The case ended up in the Court of Appeal, which asked the European Court of Justice (ECJ) for clarification on when the obligation to consult arises. The Advocate General’s opinion – which the ECJ usually follows – is reported in XpertHR’s stop press section.

XpertHR employment editor John Read commented: “Unfortunately, the Advocate General’s opinion doesn’t appear to take us much further forward than an earlier ECJ case that confused the Court of Appeal in the first place. We can only hope that the ECJ provides more clarity when giving its decision in this case, although I would not put money on it. There is much more to come on this issue and, until we get a clearer picture, employers should give careful thought to when collective consultation on redundancies should begin and ensure that it is genuine.”

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