Direct and personal
Labour & European Law Review Weekly Issue 265 19 April 2012
The law states that the collective consultation obligations are triggered if an employer makes 20 or more employees redundant within 90 days or less. In University of Stirling v University and College Union, the Employment Appeal Tribunal (EAT) said that the termination of fixed term contracts did not count as a redundancy and therefore did not trigger them.
The university regularly engaged employees on fixed term contracts (FTCs) to carry out research funded by third parties; to deliver specific projects; and to provide maternity and sick leave cover, among other things.
When the university failed to renew a number of FTCs, the UCU applied for a protective award. At a pre hearing review, the Tribunal was asked to decide, by reference to evidence called on behalf of four specific employees, whether the expiry of their FTCs without renewal, could amount to a dismissal by reason of redundancy.
This would then trigger the collective consultation requirements under section 188 of the Trade Union and Labour Relations Consolidation Act (TULRCA).
The university argued that the non-renewal of a fixed term contact was personal to those individuals and therefore the obligation to consult collectively was not triggered.
Section 188(1) of TULRCA states that if an employer “is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less” they have to consult about the proposed dismissals with the relevant representatives, in this case the UCU.
TULRA section 195 defines redundancy for the purpose of collective consultation as: “…references to dismissal as redundant are references to dismissals for a reason not related to the individual concerned or for a number of reasons all of which are not so related.“
The question for the Tribunal was whether the non-renewal of the contracts was a dismissal by reason of redundancy as defined by section195.
It said that the expression “for a reason not related to the individual concerned” was not clear because dismissal would always relate in some way to the individual and something more was required.
It therefore decided that employers must show a reason that was “direct and personal” to the dismissed employee to fall within the definition, which had not happened in this case.
As a result, the collective consultation obligations applied to three of the four test cases brought by the union.
The EAT, however, disagreed. It said the Tribunal was wrong to decide that employers must have a reason that could be described as “direct and personal”, as this amounted to importing a new definition of “relating to the individual” into the statute.
It held that the words “for a reason not related to the individual concerned” were perfectly clear and unambiguous. “A reason relates to the individual if it is something to do with him such as something he is or something he has done”.
In this case, it was clear from the facts that one of the reasons for all four dismissals was that the employee had agreed at the outset to an FTC, accepting that their employment would come to an end at a particular date or on the occurrence of a particular event.
Unlike employees employed under open-ended contracts, they did not have any reasonable expectation of employment for an indefinite period. They were therefore excluded by section195 of TULRA from the ambit of section 188.
This is an unhelpful decision for fixed term employees. Unions such as UCU have made substantial progress in recent years in many universities by agreeing policies which are designed to reduce the use and abuse of fixed term contracts. Such policies have often been agreed on the back of successful section188 claims – for example the Lancaster University v UCU EAT case (see LELR weekly 192).
The Stirling decision is therefore a backward step for fixed term employees and it is very much hoped that UCU’s appeal to the Scottish Court of Appeal will succeed.