July 27, 2015

When does the obligation to collectively consult on redundancy arise?

In February 2013 the school decided it would have to close at the end of the year if the pupil numbers had not increased by April. It ultimately decided to close in April 2013 and there was no collective consultation carried out over the decision in breach of the Trade Union Labour Relation (Consolidation) Act 1992 section 188. The EAT looked at an unresolved question on the differing tests as to what triggers the duty to consult in the case of United States of America v Nolan. The contrasting tests are, is the duty triggered when the employer is proposing a strategic decision that will possibly or inevitably lead to redundancies? Or is it triggered when the decision has actually been made and redundancies are the inevitable consequence?

The EAT held that the decision in February that the school would be closed unless numbers improved constituted a clear decision to close the school, albeit a provisional one, or alternatively it was a strategic decision on changes which forced the employer to look at a plan for collective redundancies. Either way the duty to consult arose in February 2013 and the EAT did not find it necessary to decide which test to apply.

Interestingly, and this is relevant for employers with commercial considerations of confidentiality at stake, the EAT rejected a ground of appeal arguing that special circumstances excused the failure to consult because of the need to keep the closure plans a secret for fear of a loss of confidence in the school.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.

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