Radical change of approach to collective redundancy consultation

02 July 2013

We updated you in June on a significant judgment of the Employment Appeal Tribunal (EAT) on collective redundancy consultation. The written decision has now been published, and the impact is indeed as radical as we first indicated.

From now on (or at least until this decision is successfully appealed) businesses making 20 or more redundancies within 90 days across their entire workforce (rather than on a site-by-site basis as was previously the case) will need to engage in collective consultation.

The obligation to consult collectively is derived from EU law, which offered the UK two different options for the threshold that would trigger collective consultation.  The wording adopted in the UK legislation does not sit easily with either option, and the EAT felt compelled to interpret the UK statute in a way that conformed to the underlying EU Directive.  That meant that the words "in one establishment" in the UK legislation needed to be deleted.

This litigation arose from the collapse of the Woolworths and Ethel Austin chains, and the EAT was content to find that the representatives of all the affected employees, across all the branches of the chains, should have been consulted with, not just those branches with 20 or more employees.  How this translates into other business sectors will need careful analysis on a case-by-case basis.  If you would like to discuss the implications for your business, please feel free to contact us.