GMB and AEEU v Campbells UK Limited, Industrial Tribunal, 1 May 1998

The giant American food producer, Campbells, has ended up in the soup after an Industrial Tribunal ruled they failed to properly consult the GMB and AEEU when the company decided to close a factory in Maryport, Cumbria.

The overall effect of the decision is that employer's obligations to consult in redundancy situations begin at a much earlier stage, cover a much wider scope for discussions and require far more information than has previously been normal practice.

The Maryport factory produced Homepride cook-in sauces. The Homepride business was sold by another company to Campbells in August 1995 for £58 million.

Shortly after the purchase the company suggested to the trade unions that they were considering expanding production on the Maryport site. Two months later, without any warning, the company announced the complete closure of the Maryport site and the transfer of production to two of their own factories in the South of England.

Campbells made it clear that this was an irreversible decision. The company then entered into consultation with local trade union officials on primarily a financial package and how the run down of the factory would be conducted.

There were over 120 redundancies involved. After 63 days of consultation agreement was reached on a financial package and all the workers were given formal notice of the termination of their employment. The factory finally ceased production in March 1996. 
The unions then submitted protective award applications and unfair dismissal claims on behalf of their members. Thompsons acted on behalf of both unions.

The IT eventually ruled that the company had failed to consult properly in accordance with the provisions of Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992.

However, the importance of the tribunal's decision is in its interpretation of the employer's obligations under the 1992 Act. The tribunal held that the Act had been amended so as to bring it into line with the Collective Redundancies Directive and that the employers' obligations were radically different from those that existed prior to the amendment of the Act in 1993.

The tribunal held that the extent of the employer's obligations was clear from the subjects about which they are obliged to provide information. Consultation does not relate simply to the methods of handling the dismissals, it must relate to the issue of whether there should be any dismissals at all, and in this case, whether there should be a closure of the work place.

The tribunal decided that the law now requires an employer to consult about the decision itself and not simply about how that decision should be implemented. This means an employer has an obligation to consult with the trade unions before reaching a conclusion to close a plant or proceed with redundancies, the obligation to consult arose when there was a proposal and this was very much before there was a decision.

The employers had commissioned a number of internal reports into the viability of the Maryport plant. The tribunal held that the employer had an obligation to provide that information to the unions. The unions could then seek its own expert opinions on the issues raised so that counter arguments could be put to the employers before they reached their conclusions.

The obligation to provide information should be interpreted widely to include the obligation to provide relevant information supporting the employer's proposal.

This is important because it is accepted by the Courts that consultation cannot begin until the required information has been provided.