Labour & European Law Review Weekly Issue 432 12 August 2015
Section 188 of the Trade Union and Labour Relations Consolidation Act 1992 (TULRCA) states that employers have to consult employees before dismissing them if they intend to make 20 or more of them redundant within a certain timescale. In E Ivor Hughes Educational Foundation v Morris and ors, the Employment Appeal Tribunal (EAT) held that the obligations are triggered even if the decision to close is a provisional one.
The claimants’ union, Unison, instructed Thompsons to represent one of its members.
Because of falling numbers, the school decided in February 2013 that it might have to close in April. As things did not improve, the decision was taken at the governors’ meeting in April to close the school at the end of the summer term. In order to save an extra term’s salary, staff were given notice of dismissal on 29 April that their contracts would end on 31 August 2013.
However, as the governors did not know that they had a legal obligation to consult anyone they were proposing to dismiss and did not seek legal advice, they did not consult the staff prior to informing them that they would be made redundant.
The 24 claimants brought proceedings in the tribunal alleging that the school was in breach of its obligations under section 188 of the TULRCA and that it was therefore obliged to pay a protective award.
Section 188(1) states that “Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals …”.
Section 188(7) states that if there are special circumstances meaning it is not reasonably practicable for the employer to comply, they must take whatever steps they can to ensure compliance in the circumstances.
The tribunal took the view that the decision taken at the February meeting to close the school in April amounted to a proposal to make redundancies. Although it was not the final decision – that was to take place in April – redundancies were certainly being proposed at that stage, thereby triggering the collective consultation obligations.
Nor were there any special circumstances that the school could rely on to avoid their obligations, such as the fear that the plan to close might leak out (as this could apply to just about any situation to close down a business); or the desire on the part of the school to avoid paying an extra term’s salary. If the school had taken advice, it could have ensured that consultation took place 30 days before the time to give notice. The tribunal therefore awarded the maximum 90 days’ protective award.
And the EAT agreed. The decision in February to close the school unless numbers increased indicated a fixed, clear (albeit provisional) intention to close. Alternatively, it amounted to a strategic decision on changes compelling the employer to contemplate or plan for collective redundancies. On either analysis, the duty to consult arose on that date.
It also rejected the school’s argument with regard to special circumstances. Section 188(7) was concerned with actual events and not with what an employer might, with hindsight, have thought about consultation if they had addressed their mind to it at the relevant time. The fact that the school subsequently identified two reasons for not consulting did not constitute special circumstances.
The EAT upheld the decision to award each claimant the maximum award of 90 days’ gross pay.