Middlesbrough Borough Council v TGWU and UNISON [2001] IRLB 670
In a welcome decision the EAT has highlighted an employer's obligations to consult over proposed redundancies. It is not sufficient for the employer to consult over ways of reducing the numbers to be made redundant, it must also consult about ways of avoiding the dismissals altogether.
Following local government reorganisation in 1996, Middlesbrough Borough Council faced serious financial problems. The management team proposed reducing the number of employees in one dept. On 24 June 1998, the council sent the unions a copy of its notification of redundancies that said that up to 150 staff in the department would be made redundant as at 30 September 1998. At the council meeting on 2 July, the redundancy of 'up to 150 employees' was approved and redundancy notices were issued the next day.
Section 188(2) of TULRCA says that 'consultation' must include consultation about ways of: avoiding the dismissals; reducing the number of employees to be dismissed; and mitigating the consequences of dismissals.
The unions argued at the Employment Tribunal that, although they made representations at the council meeting on 2 July, they were never consulted about ways of avoiding the dismissals and therefore the council had breached section 188. In effect, the decision to make staff redundant was already 'set in stone' by the time of the council meeting on 2 July. The Tribunal agreed.
The first point for the EAT was when the timetable for consultation begins. They held that the relevant date is the effective date of termination and therefore the consultation should start 90 or 30 days (depending on the scale of the redundancies) before the end of the notice period and not by reference to the date the notice is given. This means that the consultation can take place during the notice period itself.
Upholding the substance of the Tribunal decision, the EAT confirmed that the three topics of consultation spelled out in section 188 must each be consulted over. This requirement was mandatory - it was not open to an employer to escape its obligations on the grounds that consultation under any heading would be futile.
The EAT agreed that it was plainly open to the Tribunal to conclude that even if there had been any consultation over the ways of avoiding dismissals, that consultation was a sham. In reality, there was no prospect of avoiding redundancies in the minds of council members. Even if the Tribunal took into account consultation after the issue of redundancy notices on 3 July, that conclusion was unaltered.
The council argued that the 'special circumstances' defence applied. Section 188(7) states that if there are special circumstances that make it not reasonably practicable to comply with the consultation obligation, then an employer need only do their best in the circumstances. Dire financial circumstances can amount to special circumstances and the defence is raised when the consultation period has been too short. In this case because there simply had been no meaningful consultation on ways of avoiding dismissal at all, the special circumstances defence failed. The case is interesting because it is all too common for employers to fail to consult about the principle of redundancies, even if they consult about ways of minimising the numbers to be made redundant.