Consultation with employees on redundancies can bring some workable solutions, says Philip Whiteley
Amid the furore of BMW’s deal to sell Rover, it would be easy to assume employers have minimal duty to inform staff of closures and redundancies.
But while the initial announcement can sometimes be made prior to consultation, there is continuing legal ambiguity. And there are strict rules on talks that must be held on the details.
Last month a tribunal ruled that Middlesbrough Council was in the wrong after it issued redundancy notices to 345 employees the day after councillors approved the redundancy plan. It came shortly after Personnel Today revealed how the retail giant Sainsbury's is facing dozens of claims for unfair dismissal over allegedly illegal setting of criteria while making 100 managers redundant.
The law appears to be clear. There must be consultation over redundancies. Where more than 20 staff are affected it must be on a collective basis. Criteria must be fair, and the grounds for job cuts must be genuine financial pressures.
Moreover the law was toughened last autumn. All employees in the relevant business unit must be consulted - not just those about to be made redundant. The union must be the consulting partner where it is recognised.
Where the grey area occurs is in the stage at which consultation should begin. Middlesbrough Council argued that as long as consultation had begun as dismissal notices are issued this is sufficient. It is to appeal against the recent ruling.
Unions argue part of the trouble stems from a misunderstanding of stock market rules, which appears to be filtering through to private companies and the public sector.
The MSF is fighting to overturn in the European Court a tribunal ruling it lost last year against United Assurance. The company was formed by United Friendly and Refuge Assurance and said there would be 1,700 redundancies as it announced the merger.
The tribunal agreed there has to be a specific proposal for redundancies before consultation begins. But MSF said that the European Collective Redundancies Directive refers instead to consultation where an employer is "contemplating" mass redundancies. Last month it lodged a formal complaint with the European Commission.
Middlesbrough Council made a similar defence to United Assurance's, arguing that it is acceptable to begin consultation once