Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) requires employers to consult collectively when dismissing as redundant 20 or more employees at one “establishment” within 90 days or less. In Renfrewshire Council v The Educational Institute of Scotland, the Employment Appeal Tribunal (EAT) said that when deciding the identity of the “establishment” tribunals must determine the factual issue of where the worker was assigned to carry out their duties.
A trade union for Scottish teachers brought a claim on behalf of a group of teachers on the basis that the employer had failed to consult with the union about collective redundancies in breach of section 188.
The Council argued that the obligation to consult collectively did not arise because the “establishment” referred to in section 188 was the individual school at which each of the teachers worked. As fewer than 20 employees were being made redundant from each of them the duty to consult did not arise. The union argued that a wider definition - all secondary and/or all primary schools - should apply, thereby triggering the duty to consult.
The tribunal decided that as a school was not a distinct entity, nor could all the secondary and primary schools in Renfrewshire be taken as a whole, the “establishment” was the Council’s Education and Leisure Service. It based this decision, among other things, on the letter of appointment to individual teachers which said: “I am pleased to inform you that you have been appointed to the Education and Leisure Service ...”, as well as the relevant case law at the time (Wilkinson v. City of Edinburgh Council).
It appears that the tribunal was also influenced by the fact that the teachers’ contracts contained a mobility clause which, although rarely used, required the teachers to move around the city as was “deemed reasonable” by the Council and by the fact that the overall operation, funding and staffing of schools fell within the control of the education department.
The EAT overturned the tribunal’s finding, saying that any decision which found that a school was not a distinct entity “flies in the face of reason”. However, as this was a test case in which the tribunal only reviewed a specimen contract and did not consider the factual evidence of particular employees, this did not mean that an individual school would always be the unit (or “establishment”) to which the teachers were assigned to perform their duties, but it was obvious that it could be.
The EAT also criticised the tribunal for emphasising the importance of the mobility clauses in the teachers’ contracts as the issue of “assignment” to an establishment referred to the factual (rather than contractual) position.
The tribunal had also concentrated too much on the place from which many aspects of the teachers’ employment was controlled and not enough on the place where the employees actually worked. Although employers made up of distinct establishments (such as local authorities) inevitably had a degree of central control, that did not mean that local units had no status as the relevant “establishment” for the purpose of section 188.
The EAT confirmed that the critical question should be which unit the worker was assigned to perform their duties. That generally involves two questions: is that unit capable of being an establishment; and if so, is the employee assigned to it?
The EAT remitted the case to the same tribunal to decide what would be a “simple and stark” question for most of the affected employees: was the school or the Education and Leisure Service the unit to which the relevant teachers were in fact assigned to perform their duties?
This case offers some very helpful analysis about the discrete issue of whether there is an “establishment” for the purposes of triggering the collective redundancy consultation rights under section 188 TULRCA. A tribunal must always identify and determine the unit to which those workers made redundant were assigned to carry out their duties, which will be a finding of fact based on the individual circumstances of the particular affected employees.