July 31, 2015

Collective Redundancy Consultation

In E Ivor Hughes Educational Foundation v Morris UKEAT/0023/15, the Employment Appeal Tribunal (EAT) considered the implications of an employer’s failure to consult with its employees in breach of U.K. collective redundancy legislation.

In February 2013, a private school decided that it would need to close down unless the number of pupils increased by April. This did not happen and so at the end of April, with no prior consultation, the school issued notices of termination to all its employees (of whom there were more than 20). The employees brought claims for breach of U.K. collective redundancy legislation which imposes specific consultation obligations on employers proposing to make 20 or more redundancies in a 90-day period. The school admitted that it had not carried out any consultation because it had been unaware of its obligation to do so. The EAT upheld the claims and awarded the maximum award of 90 days’ uncapped pay per employee. In doing so, it noted that the award was intended to be punitive, not compensatory. It also held that the consultation obligations had been triggered in February (rather than April) because at that point the decision to close down was both “fixed as a clear, albeit, provisional intention” and “a strategic decision on changes compelling the employer to contemplate or plan for collective redundancies.” In any event, this was immaterial in light of the school’s admission that it failed to carry out any consultation. The EAT also rejected as “artificial” the school’s attempts to argue retrospectively that it had been exempt from the consultation obligations because it needed to keep the plans confidential.

This case is a reminder that collective consultation obligations are triggered at the “proposal” stage and that Employment Tribunals are prepared to award the maximum awards for a failure to comply with them.

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