Collective Redundancies: Information, Consultation and Protection

Giles Powell

Old Square Chambers 10-11 Bedford Row London, WC1R 4BU T. 0 0 ! "# 0$00 %. &ler's(oldsquare.&o.u' W. www.oldsquare.&o.u'

Colle&)*+e Redundan&*es, -nforma)*on, Consul)a)*on and .ro)e&)*on

.ROT%CT-/% 0W0R1S 1. ST0TUTOR2 B0S-S 1.1. The EU Directive !"# $re%lacin& '#"1( ) on Collective Redundancies was im%lemented in U* law +, what is now ss.1!! - 1 ( of the Trade Union and .a+our Relations $Consolidation) /ct 1 ( $0TU.RC/1).

1.(. The main relevant %rovisions of TU.RC/ are as set out at /%%endi2 1. . W30T -S R%1U4104C2 5 (.1. The definition of redundanc, for the %ur%ose of the ri&ht to a redundanc, %a,ment, unfair dismissal, etc is the familiar one contained in s.13 $1) of the Em%lo,ment Ri&hts /ct 1 4 $0ER/1). 5or TU.RC/ %ur%oses, however, there is another and si&nificantl, wider definition, ta6en in %art from the EU Directive. 7, s.1 #$1) of TU.RC/ references to dismissal as redundant are references to dismissal for a reason not related to the individual concerned or for a number of reasons all of which are not so related . 7, s.1 # $(), where an em%lo,ee is or is %ro%osed to +e dismissed, it shall +e %resumed, unless the contrar, is %roved, that he is or is %ro%osed to +e dismissed as redundant. 8here an em%lo,er sou&ht to im%ose new terms and conditions of em%lo,ment, and, havin& failed to o+tain a&reement, dismissed the wor6force, intendin& to defend an, unfair dismissal com%laints on the &round of 0some other su+stantial reason1, it was held that for the %ur%oses of the o+li&ation to inform and consult, the dismissals were +, reason of redundanc,: GMB v Man Truck and Bus UK Limited [2000] IRLR 636. The Directive re9uires an em%lo,er who contem%lates collective redundancies +oth to consult with wor6ers: re%resentatives $+e&innin& to do so in good time) and to notif, a com%etent %u+lic authorit,; and %ro<ected redundancies must not ta6e effect earlier than 3= da,s after the notification. German law, and most Euro%ean s,stems other than those of the U*, &ives an im%ortant role to the %u+lic authorit, in mana&in& collective redundancies. In the U*, the re9uirement that the em%lo,er notifies the DTI on form >R1 is mainl, used to ena+le the de%artment to com%ile statistics. Junk v Kuhne [200!] IRLR 3"0 #$%J& was a reference +, the 7erlin /r+eits&ericht, and arises out of the ver, different collective redundanc, s,stem in German,. The EC@ held that 0redundanc,1, for the %ur%ose of the Directive, means a declaration +, the em%lo,er of the intention to terminate the contract of em%lo,ment $that is, the &ivin& of notice to terminate) rather than the actual termination of em%lo,ment on e2%ir, of the notice %eriod. This %oint was e2%ressl, a%%roved +, the E/T in .eicestershire Count, Council v Unison A(==#B IR.R (= where it was held that, a%%l,in& Junk, construin& 0%ro%osin& to dismiss1 as 0%ro%osin& to &ive notice of dismissal1 does not involve an, strainin& of the lan&ua&e of Cection 1!! $see also the decision of the Court of /%%eal on different %oints, A(==4B IR.R !1=). The o+li&ation to consult with em%lo,ee re%resentatives, and to notif, %u+lic authorities, arises %rior to an, decision to terminate contracts of em%lo,ment. /n em%lo,er is not entitled to carr, out collective redundancies +efore consultation and the notification %rocedure, under the Directive, have +een com%leted. /rticle ( im%oses an o+li&ation to
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ne&otiate, and the effectiveness of such an o+li&ation would +e com%romised if the em%lo,er could terminate contracts of em%lo,ment durin& the course of the %rocedure, or even at the start of it. It follows that the su+stantive o+li&ations under the Directive to notif, and then to allow at least 3= da,s to ela%se, and to consult 0in &ood time1 with a view to reachin& a&reement, ie to ne&otiate, must have +een com%lied with +efore redundanc, dismissal notices are issued. This does not necessaril, mean that the full consultation %eriod re9uired +, U* law must have run its course +efore notices are issued. >owever, trade unions are li6el, to e2%loit the decision +, refusin&, until the end of that %eriod, to concede that consultation has come to an end, and it ma, also +e ar&ued that the Directive is not full, im%lemented +, the %rovisions of TU.RC/, since the, define the re9uired consultation %eriods +, reference to when the dismissals ta6e effect rather than from when the, are &iven. (.4. TU.RC/ s 1 3 was amended with effect from 1 Dcto+er (==4 to re9uire notification to the Cecretar, of Ctate at least 3= da,s +efore redundanc, notices are issued $rather than +efore the, ta6e effect). The DTI did not consider it necessar, to amend the re9uirements as to information and consultation, as the, were thou&ht not to +e inconsistent with Junk.

$. W30T -S 1-S6-SS0L 5 3.1. 5or this %ur%ose, the definition is the familiar one from s. # of the ER/. Ean, collective redundanc, e2ercises involve calls +, the em%lo,er for volunteers. If em%lo,ees volunteer and are acce%ted, the, will leave +, mutual a&reement: ,et their de%arture will still count as dismissal for the %ur%ose of the o+li&ation to consult. 8here the whole +ac6&round to the em%lo,ees: de%arture is the determination of the em%lo,er to close a factor, and ma6e all em%lo,ees inevita+l, redundant, the fact that some em%lo,ees acce%ted a %ac6a&e as a means of effectin& that decision does not %reclude a findin& that the, were dismissed. /ll em%lo,ees, includin& the volunteers, were entitled to a %rotective award: 'c(tch )remier Meat Limited v Burns [2000] IRLR 6*". 7, s. #$1)$+) of ER/, the non-renewal of a limited term contract amounts to a dismissal. It ma, seem odd that, where a fi2ed term has +een a&reed in advance, and dismissal will sim%l, arise from its non-renewal, the em%lo,er must still consult; ,et this is so: +UT v Universit, (- .e/cast e ["011] IRLR "0. In com%utin& the num+er of em%lo,ees whom the em%lo,er %ro%oses to dismiss, the tri+unal should include an, whom the em%lo,er ho%es to rede%lo,, if o+<ectivel, s%ea6in&, it intends to withdraw the e2istin& contracts of em%lo,ment, or the de%artures which it %ro%oses to the e2istin& contracts amount to withdrawal of them under the %rinci%le in 2(33 v 4(ver %( e3e ["000] I%R 30: 2ard, v T(urism '(uth $ast [200!] IRLR 2*2 #$+T&. / tri+unal should also include an, who are invited to volunteer for redundanc,, do so and whose em%lo,ment is terminated on that +asis: 56tare Gr(u6 Limited v T7G8U [2009] IRLR 03" #$+T&.

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4. W3%4 0R% %6.LO2%%S 70T O4% %ST0BL-S36%4T8 5 ?.1. There is no statutor, definition of the term 0esta+lishment1. In R(ck-(n +:' v '6ecia ar;e<der-(r;undet i 4anmark ["006] IRLR "61, the EC@ held that the term as used in the EU Directive means the unit to which the workers made redundant are assigned to carry out their duties. It is not essential, in order for there to be an establishment, for the

unit in question to be endowed with a management which can independently effect collective redundancies. ?.(. In M'= v Re-u3e +ssurance ) c [2002] IRLR 32* , the em%lo,ees affected +, redundanc, were field sales staff of two insurance com%anies, all of whom wor6ed from $and were assi&ned to) a +ranch office, each of which was an inde%endent cost centre with its own +ranch mana&er who was line mana&er to the staff em%lo,ed there. The ET held that, des%ite these facts, the esta+lishment at which the, were em%lo,ed was the entire field staff of the em%lo,er in 9uestion. The E/T, while remar6in& that the view of the ET a%%eared to ma6e &ood sense from the %oint of view of industrial relations, u%held the em%lo,er:s a%%eal. /t the %oint at which the em%lo,er was %ro%osin& to ma6e redundancies, it had not reached the %oint at which it could +e said that more than (= would +e dismissed at an, one +ranch. This uncertaint, did not <ustif, a de%arture from the R(ck-(n test. In +thinaiki %hatr(6(iia +$ v )ana3i(utidas [2009] IRLR 21* #$%J&> the com%an, in 9uestion had three se%arate %roduction units in three se%arate locations in Greece: a unit for the manufacture of writin& %a%er, %rintin& %a%er, mechanical %a%er, chi% +oard and aluminium sul%hate; a second unit for the manufacture of soft 6itchen %a%er, toilet %a%er and +a&s, and a third unit for the %rocessin& of soft %a%er. The com%an, decided to close down its first unit, dismissin& almost all of the wor6force of that unit. The 9uestion for the EC@ was whether such a %roduction unit came within the conce%t of 0esta+lishment1 for the %ur%oses of the a%%lication of Directive !"# . The EC@ held that it did. The court held that 00esta+lishment1 in the conte2t of an underta6in&, ma, consist of a distinct entit,, havin& a certain de&ree of %ermanence and sta+ilit,, which is assi&ned to %erform one or more &iven tas6s and which has a wor6force, technical means and a certain or&anisational structure allowin& for the accom%lishment of those tas6s1. Eoreover, 0the entit, in 9uestion need not have an, le&al autonom,, nor need it have economic, financial, administrative or technolo&ical autonom, in order to +e re&arded as an 0esta+lishment11. /s %er R(ck-(n, the EC@ held that the unit in 9uestion need not +e endowed with a mana&ement which can inde%endentl, effect collective redundancies nor must there +e a &eo&ra%hical se%aration from the other units and facilities of the underta6in&. In res%ect of the facts of the %articular case, the EC@ noted that the unit in 9uestion had distinct e9ui%ment and a s%ecialised wor6force, its o%eration was not affected +, that of the other units, it had a chief %roduction officer who ensured that the wor6 was carried out %ro%erl, and su%ervised the entire o%eration of the units installations and ensured that technical 9uestions were solved. The EC@ noted that 0Those factors clearl, &ive such a unit an air of 0esta+lishment1 for %ur%ose of ... the Directive......The fact that decisions concernin& the o%eratin& e2%enditure of each of those units, the %urchase of materials and the costin& of %roducts are ta6en at the com%an,:s head9uarters, where a <oint accounts office is set u%, is irrelevant in this re&ard.1.

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9. W3%4 1O%S T3% %6.LO2%R 7.RO.OS% TO 1-S6-SS 0S R%1U4104T85 #.1. ..a proposal to make redundanciesconnotes a state of mind directed to a planned or proposed course of eventsThe employer must have formed some view as to how many are to be dismissed, when it is to take place and how it is to be arranged. This goes beyond the mere contemplation of the event : +ss(ciati(n (- )attern Makers and + iance %ra-tsmen v Kirvin Limited ["091] IRLR 3"1 #$+T&.

#.(. The EU Directive a%%lies $as did the %revious version of it) where an employer is
contemplating collective redundancies1 There has +een much de+ate on the distinction +etween 0contem%latin&1 and 0%ro%osin&1. #.3. In R v British %(a %(r6(rati(n and '5'TI e? 6arte @ard, ["003] IRLR "0* , the Divisional Court said $o+iter) In my view, the difference between the wording of the !ollective "edundancies# $irective and the wording of s. %&& of the 'ct of %(() is such that the section cannot be interpreted as having the same meaning as the !ollective "edundancies# $irective..the verb proposes in its ordinary usage relates to a state of mind which is much more certain and further along the decision*making process than the verb contemplate+, in other words the !ollective "edundancies# $irective envisages consultation at an early stage when the employer is first envisaging the possibility that he may have to make employees redundant. ,.%&& applies when he has decided that, whether because he has to close a plant or for some other reason, it is his intention, however reluctant, to make employees redundant $%er Glidewell .@). The Divisional Court:s readin& of the Directive in @ard, is su%%orted +, the <ud&ment of the EC@ in Junk. In M'= v Re-u3e +ssurance ) c [2002] IRLR 32* , the E/T, citin& the %assa&e from @ard, 9uoted a+ove, held that s.1!! cannot +e construed to accord with the Directive without distortin& the meanin& of the domestic le&islation. 5or the %ur%ose of the Directive, an em%lo,er 0contem%lates1 collective redundancies when he so envisa&es the %ossi+ilit, that he ma, have to ma6e em%lo,ees redundant that he then has in view, at least as a contin&enc,, that the num+ers, the %eriod and the esta+lishment or esta+lishments involved would amount to a 0collective redundanc,1 within the meanin& of the Directive. >owever, s.1!! creates no o+li&ation to consult earlier than the %oint at which the em%lo,er is 0%ro%osin&1 to dismiss (= or more em%lo,ees at one esta+lishment within a %eriod of = da,s or less. The Chort D2ford En&lish Dictionar, definition of 0%ro%ose1 is to lay before another or others as something which one offers to do or wishes to have done . >ere, Refu&e /ssurance and United 5riendl, /ssurance a&reed to mer&e. Eore than = da,s: notice was &iven of a %lan which included the closure of the >ead Dffice of U5I, +ut EC5 ar&ued that to have +e&un 0in &ood time1 consultation should have +e&un as soon as the mana&ement team had a %lan which was li6el, to lead to redundancies. The E/T u%held the findin& of the ET that this was not so: there was a distinction to be drawn between the employer at a management level formulating a plan which may have the likely consequences of redundancies and his making a proposal to dismiss. Dnl, at the later sta&e did the o+li&ation under s.1!! arise. EC5 was not a+le to see6 direct enforcement of the Directive, and the com%laint failed. Em%lo,ers who had in mind two alternative o%tions, %lant closure or redundancies and sale as a &oin& concern, were at that %oint 0%ro%osin&1 to dismiss em%lo,ees as redundant. -e consider this to be essentially a question of fact, given that the word propose connotes an intention in the mind of the employer. the tribunal was more than entitled to conclude that by the board meetingthe board were embarked on a closure policy relating to redundancies which meets the general notion of a proposal : 'c(tch )remier Meat Limited v Burns [2000] IRLR 6*" #$+T&. UK %(a Minin3 Limited v .UM and B+%M [2001] IRLR * concerned the e2tent of the dut, to consult in the conte2t of the closure of a collier,. /s %art of a cross a%%eal +, the unions, the E/T considered 0whether the limitation im%osed +, the word 0%ro%osed1, when contrasted with 0contem%lated1, %revents the consultation o+li&ation e2tendin& to

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Article 2.1 5

consultations over closures leadin& to redundancies. The E/T considered that it did not. The E/T held $%er Elias @) that 0in a closure conte2t where it is reco&nised that dismissals will inevita+l,, or almost inevita+l,, result from the closure, dismissals are %ro%osed at the %oint when the closure is %ro%osed. The difference +etween %ro%osed and contem%lated will still im%act on the %oint at which the dut, to consult arises F it will not +e when the closure is mooted as a %ossi+ilit, +ut onl, when it is fi2ed as a clear, al+eit %rovisional, intention. 7ut the o+li&ation to consult over avoidin& the %ro%osed redundancies inevita+l, involves en&a&in& with the reasons for the dismissals , and that in turn re9uires consultation over the reasons for the closure. Ctrictl, , of course, it is the %ro%osed dismissals that are the su+<ect of consultation, and not the closure itself. /ccordin&l,, if an em%lo,er %lanned a closure +ut +elieved that redundancies would nonetheless +e avoided, there would +e no need to consult over the closure decision itself, at least not %ursuant to the o+li&ations under the 1 ( /ct. In the conte2t of a closure, that is li6el, to +e a ver, e2ce%tional case. 8here closure and dismissals are ine2trica+l, interlin6ed, the dut, to consult over the reasons arises.1. /n o+iter dictum to the o%%osite effect in @ard, was no lon&er &ood law, followin& chan&es to the relevant statutor, %rovisions. #.'. There is in addition a case currentl, +efore the EC@: +kavan $rit,isa (<en Keskus iitt( +$K v =u<itsu #%ase %A**:01& , which was referred on ! 5e+ruar, (==!. The reference %oses a num+er of 9uestions: $1) Does the directive re9uire consultations to +e started when it is esta+lished from strate&ic decisions or chan&es that have +een made relatin& to the activit, that a need for collective redundancies of em%lo,ees followsG Dr is the %rovision in 9uestion to +e inter%reted as meanin& that the o+li&ation to start consultations alread, arises on the +asis of the em%lo,er contem%latin& measures or chan&es affectin& the activit,, such as a chan&e in %roduction ca%acit, or a concentration of %roduction, as a conse9uence of which a need for collective redundancies is to +e e2%ectedG $() Does the re9uirement to start consultations when 0contem%latin&1 collective redundancies and 0in &ood time1 re9uire consultations to +e started alread, +efore the em%lo,er:s intentions have reached the sta&e at which the em%lo,er is re9uired to identif, and su%%l, to the em%lo,ees the information s%ecified in /rticle ($3)$+)G $3) Do /rticle ($1) and ($?) mean that, in a situation in which the em%lo,er is controlled +, another underta6in&, the em%lo,er:s o+li&ation to start consultations with the re%resentatives of the em%lo,ees ori&inates when either the em%lo,er or the %arent com%an, controllin& the em%lo,er contem%lates action for collective redundancies of em%lo,ees in the em%lo,er:s serviceG $?) in the case of consultations to +e carried on in a su+sidiar, +elon&in& to a &rou%, does the o+li&ation to start consultations alread, arise when the mana&ement of the &rou% or %arent com%an, contem%lates collective redundancies +ut that intention has not ,et ta6en concrete form as concernin& the em%lo,ees of a %articular su+sidiar, under its control, or does the o+li&ation to em+ar6 on consultations within the su+sidiar, arise onl, at the sta&e when the mana&ement of the &rou% or the %arent com%an, contem%lates collective redundancies s%ecificall, in that su+sidiar, com%an,G $#) If the em%lo,er is an underta6in& controlled +, another underta6in&, does /rticle ( of the Directive mean that the consultation %rocedure must +e concluded +efore the decision on collective redundancies to +e im%lemented in the su+sidiar, com%an, is ta6en within the %arent com%an, or the &rou% mana&ementG $4) If ,es, is it onl, a decision whose direct conse9uence is the im%lementation of collective redundancies in the su+sidiar, com%an, that is relevant in that connection, or must the consultation %rocedure +e +rou&ht to a conclusion alread, +efore a commercial or strate&ic decision is ta6en within the %arent com%an, or the &rou% mana&ement on the +asis of which collective redundancies in the su+sidiar, com%an, are %ro+a+le +ut not ,et finall, certainG

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In Midd es;r(u3h B(r(u3h %(unci v TG8U [2002] IRLR 332 , the senior officers of the Council were faced with a +ud&et deficit, and decided that redundancies were necessar,. / decision was made to reduce num+ers in a %articular de%artment. The Union was informed, consultation meetin&s were held, and a meetin& of the Council a%%roved a %lan for redundancies. The com%laint of +reach of s.1!! was u%held: the o+li&ations under s.1!! to consult a+out wa,s of $a) avoidin& dismissals $+) reducin& the num+er of em%lo,ees to +e dismissed and $c) miti&atin& the conse9uences of dismissal, are dis<unctive. /n em%lo,er who &enuinel, consults a+out $+) and $c) ma, nevertheless fail to consult a+out $a). The em%lo,er cannot %lead, at this %oint, that consultation would +e utterl, %ointless and futile. Dn the facts, the ET found that the decision to ma6e redundancies had +een made in advance of the meetin& with the Union, and an, %ur%orted consultation a+out avoidin& the redundancies was a sham. The E/T u%held the findin& that there was +reach of s.1!!. In 'ecuric(r 5me3a $?6ress Limited v GMB [200*] IRLR 0 , the em%lo,er decided to close two +ranches and ma6e redundancies at a third. Dn 1= Decem+er it met with the Union and informed it of the decision. Redundanc, notices were %osted at the affected +ranches the ne2t da,. Individual consultation too6 %lace. Redundancies too6 effect on 1! @anuar,. The ET u%held the com%laint +, the GE7 that, since the decision to close +ranches and ma6e redundancies had +een made +efore the meetin& with GE7, there had +een no consultation at all a+out wa,s of avoidin& dismissals or reducin& the num+er of those affected. The E/T $7urton P) allowed the em%lo,er:s a%%eal. To com%l, with s.1!!, consultation must in &eneral +e fair and meanin&ful, +ut does not e2tend to the economic +ac6&round or conte2t in which the redundanc, %ro%osal arises. /lthou&h the em%lo,ers had made a decision +efore meetin& GE7 to close +ranches etc, there had +een no decision as to the num+er of redundancies or who should +e selected. There was ade9uate consultation at the meetin&. There had +een no +reach of s.1!!. The decision in 'ecuric(r 5me3a $?6ress Limited v GMB should however +e viewed in the li&ht of the su+se9uent decision of the E/T in UK %(a Minin3 Limited v .UM and B+%M [2001] IRLR *. 8hile acce%tin& that, strictl,, consultation would +e over the %ro%osed dismissals and not the closure itself, where, in a closure conte2t, it is reco&nised that dismissals will inevita+l,, or almost inevita+l,, result from the closure, dismissals are %ro%osed at the %oint when the closure is %ro%osed. The o+li&ation to consult over avoidin& the %ro%osed redundancies inevita+l, involves en&a&in& with the reason for the dismissals and that 0inevita+l, involves en&a&in& with the reasons for the dismissals, and that in turn re9uires consultation over the reasons for the closure1. Cee also @au?ha M(t(rs Limited v T7G8U [2006] IRLR 69* #$+T& The em%lo,er had a lar&e num+er of o%erators on fi2ed term contracts. 5rom 5e+ruar, (==3 the em%lo,ers and the union had a series of consultations which %rovided effective so that there were no redundancies durin& (==3. 7, the end of Ce%tem+er (==?, due to various measures, onl, ?4 tem%orar, em%lo,ees remained. In the meantime the em%lo,er decided that a restructurin& resultin& in lar&e-scale redundancies was necessar, and the remainin& ?4 tem%orar, em%lo,ees were dismissed. The E/T held that, where the consultation deals with the same em%lo,ees and the same %ros%ective redundancies, section 1!! does not re9uire a fresh round of consultation. 8hilst it did not have an unlimited shelf life, the reference to a %eriod of = da,s does not mean that if consultation e2tends +e,ond that %eriod it must +e restarted. Ultimatel, it de%ends u%on the facts. In the %resent case the seamless (( month consultation %eriod with its on&oin& dialo&ue +etween em%lo,er and union a+out the status, e2tension and transfer of tem%orar, em%lo,ees was e2actl, what the directive envisa&ed.

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4.#. The Information and Consultation of Em%lo,ees Re&ulations (==? $0ICE1) $im%lementin&
the EU Directive on Information and Consultation (==("1?) define ( 0consultation1 as the e.change of views and establishment of a dialogue between the em%lo,er and re%resentatives or em%lo,ees, and $su+<ect to an, e2%ress a&reement) re9uire 3 lar&e em%lo,ers? to %rovide information u%on:
/a0 the recent and probable development of the undertaking1s activities and economic situation+ /b0 the situation, structure and probable development of employment within the undertaking and on any anticipatory measures envisaged, in particular, where there is a threat to employment within the undertaking+ and /c0 sub2ect to the e.ception mentioned below#, decisions likely to lead to substantial changes in work organisation or in contractual relations, including those referred to in T34"!' ss. %&& to %() and the corresponding provisions in T356#.

4.4. The e2ce%tion is that the o+li&ation under ICE to inform and consult ceases once the
em%lo,er has come to +e under a dut, to consult under TU.RC/ s.1!! $or TUPE), and has notified the 0information and consultation re%resentatives1 that it will com%l, with that dut, rather than the Re&ulations.#

4.'. Com%laints of failure to com%l, with a ne&otiated a&reement, or with the standard
%rovisions which a%%l, in default of a&reement, are heard +, the Central /r+itration Committee.4 If the C/C finds a com%laint to +e well founded, the E/T ma, issue a %enalt, notice.' The %enalt, ma, not e2ceed H'#,===. Eatters to +e ta6en into account +, the E/T when settin& the amount of a %enalt, include: $a) the &ravit, of the failure; $+) the %eriod of time over which the failure occurred; $c) the reason for the failure; $d) the num+er of em%lo,ees affected +, the failure; and $e) the num+er of em%lo,ees em%lo,ed +, the underta6in& or, where a ne&otiated a&reement covers em%lo,ees in more than one underta6in&, the num+er of em%lo,ees em%lo,ed +, +oth or all of the underta6in&s.!

4.!. The first case in which the E/T was called u%on to issue a %enalt, notice, +micus v
Macmi an )u; ishers Limited [2009] IRLR 11!, was 0not the most serious breach of these obligations which might be envisaged, but nonetheless a very grave breach affecting many employees. The E/T im%osed a %enalt, of H##,=== which was intended to deter others from adopting what can only be described as the wholly cavalier attitude to their obligations that has been demonstrated by this company. Com%laints of
( 3

by Regulation 2 by Regulation 20 (1) ? From 6 April 2005, t o!e "it 150 or more employee!, #rom April 2007 t o!e "it 100 or more an$ #rom April 200% t o!e "it 50 or more. # Regulation 20 (5) 4 Regulation 22 (1) ' Regulation 22 (6) an$ (7) ! Regulation (23 (3) %

victimisation and unfair dismissal in connection with the consultation %rocess come to the em%lo,ment tri+unal. !. T3% 7S.%C-0L C-RCU6ST04C%S8 1%:%4C% '.1. C.1!! $') &ives the em%lo,er a defence if there are special circumstances which render it not reasonably practicable for the employer to comply with a requirement of subsection /%'0, /)0 or /70. >owever, 0-here the decision leading to the proposed dismissals is that of a person controlling the employer /directly or indirectly0 a failure on the part of that person to provide information to the employer shall not constitute special circumstances.. Come of the earlier cases indicated that courts and tri+unals mi&ht +e inclined to a%%roach the issue of s%ecial circumstances with some s,m%ath, for the %osition of an em%lo,er +eset +, the t,%e of difficult, which an em%lo,er will t,%icall, face in circumstances where wholesale redundancies are contem%lated. In +ma 3amated '(ciet, (- B(i ermakers> 'hi6/ri3hts> B acksmiths 7 'tructura 8(rkers v Ge(r3e 8im6e, ["099] IRLR 0! , the E/T held that, the difficulties that an em%lo,er encountered in forecastin& the duration of the contracts and conse9uent redundancies were the sort of considerations which in an a%%ro%riate case, would entitled an em%lo,er to %lead that it was not reasona+l, %ractica+le for him to consult sooner than he did.

'.(.

'.3. It was fairl, 9uic6l, a%%arent, however, how difficult it can +e for an em%lo,er to invo6e
the defence, even in dire financial circumstances. In % arks (- 2(ve Ltd v The BakersB Uni(n ["091] IRLR 366 #%+&,it was o+served that in &eneral terms the events that mi&ht +e considered 0normal1 for a com%an, facin& difficulties will not constitute s%ecial circumstances. Instead there must +e somethin& out of the ordinar, such as a sudden disaster or une2%ected insolvenc,. In this case the Tri+unal considered whether the insolvenc, of a com%an, constituted a s%ecial circumstance. It was decided that it was not on its own a s%ecial circumstance and that it de%ends entirel, on the cause of the insolvenc, whether the circumstances can +e descri+ed as s%ecial or not. Per Geoffre, .ane .@ at %ara&ra%h 14: ... insolvency is, on its own, neither here nor there. It may be a special circumstance, it may not be a special circumstance. It will depend entirely on the cause of the insolvency whether the circumstances can be described as special or not. If, for e.ample, sudden disaster strikes a company, making it necessary to close the concern, then plainly that would be a matter which was capable of being a special circumstance+ and that is so whether the disaster is physical or financial. If the insolvency, however, was merely due to a gradual run*down of the company, as it was in this case, then those are facts on which the Industrial Tribunal can come to the conclusion that the circumstances were not special. In other words, to be special the event must be something out of the ordinary, something uncommon+ and that is the meaning of the word special in the conte.t of the 'ct. '.?. In Uni(n (- %(nstructi(n> + ied Trades 7 Technicians v R((ke 7 '(n Ltd ["091] IRLR 20* #$+T&, the em%lo,er did not consult +ecause it had +een told +, the De%artment of Em%lo,ment that it was not necessar,. The E/T held that the words reasonably practicable cannot +e inter%reted as a%%l,in& where the %erson u%on whom lies the statutor, o+li&ation to consult over redundancies is i&norant of the %rovisions.

&art '(( o# t e Regulation! )

'.#.

8here an em%lo,er was in real difficulties and had decided to sell the com%an, as a &oin& concern and there was a real %ros%ect of a %urchase +ein& found, it was held that the disa%%earance of the last %ros%ective %urchaser ma, +e a s%ecial circumstance #+ss(ciati(n (- )atternmakers 7 + ied %ra-tsmen v Kirvin ["091] IRLR 3"1 #$+T&&. In 2amish +rm(ur v +ss(ciati(n (- 'cienti-ic> Technica and Mana3eria 'ta--s ["090] IRLR 2* #$+T&, the E/T found that waitin& for a &overnment loan in circumstances where the com%an, had alread, received su+stantial financial hel% from &overnment sources ma, +e a s%ecial circumstance. >owever, the em%lo,er still failed as a result of not havin& ta6en all ste%s as were reasona+l, %ractica+le. The tri+unal considered circumstances where+, in 1 '4 7arr, Ctaines .td ran into financial difficulties and a%%lied for assistance under the Industr, /ct. The, were &iven a loan of H44',#== +ut it %roved to +e too late and not enou&h. In Decem+er 1 '' a second Government loan was a%%lied for. Dn 1(.1.'!, this was refused althou&h it was su&&ested that the Ccottish economic %lannin& de%artment mi&ht hel%. 8hen, on 3.(.'!, the, informed the com%an, that the, would not, the com%an, laid off their entire wor6force. Dn ' 5e+ruar, 1 '!, >amish /rmour was a%%ointed receiver and he dismissed the wor6force forthwith. The E/T held that an a%%lication for a Government loan +, a com%an, in financial difficulties which had alread, received su+stantial financial hel% from Government sources is a circumstance sufficientl, s%ecial to ma6e it not reasona+l, %ractica+le to issue the formal written details re9uired +, s. $#) until the outcome of the a%%lication is 6nown. In the %resent case, the Industrial Tri+unal were not entitled to conclude that it should have +een a%%arent to the com%an, that the scales were wei&hted a&ainst a further loan +ein& &ranted; that it should also have +een a%%arent that even if &ranted it would onl, afford tem%orar, relief; and that from the autumn of 1 '' onwards the com%an, was not entitled to indul&e itself in ho%es that it could survive. In reachin& such conclusions, the Industrial Tri+unal had incorrectl,, with the +enefit of hindsi&ht, su+stituted their own +usiness and commercial <ud&ement for that of the com%an,. >owever, the a%%eal failed +ecause the com%an, had not dischar&ed the onus of showin& that the, too6 all such ste%s towards com%liance with s as were reasona+l, %ractica+le. The serious %osition of the com%an,, the im%ortance of the second loan and the inevita+le conse9uences of refusal were all matters which could and should d have +een disclosed to res%onsi+le union officials, even on a confidential +asis, at the latest when the decision to as6 for a second loan was made. This would have made it %ossi+le to conclude that the com%an, had ta6en all such ste%s as were reasona+le %ractica+le.

'.4.

'.'.

In U'4+8 v Leancut Bac(n Ltd #in iCuidati(n& ["01"] IRLR 20! #$+T& , the E/T held that the withdrawal of a %ros%ective %urchaser followed +, the sudden withdrawal of +an6 su%%ort were sufficientl, s%ecial and sudden $as o%%osed to a &radual deterioration) to constitute s%ecial circumstances. Durin& the first half of 1 ' , the directors of the res%ondent com%an, were ne&otiatin& for the %urchase of the com%an,Is shares +, a third %art,. Dn 13 Ce%tem+er 1 ' , the com%an,Is half-,ear accounts +ecame availa+le and were shown to the %ros%ective %urchaser. >e thereu%on withdrew from further ne&otiations. The com%an, informed their +an6ers and the +an6 immediatel, withdrew credit facilities and decided to a%%oint a receiver, who too6 over on the evenin& of 1? Ce%tem+er. Dn the ne2t da,, Caturda, the 1#th, the com%an,Is mana&in& director contacted the unionIs area or&aniser and arran&ed a

10

meetin& with him on Eonda, mornin& the 1'th. /t that meetin&, the union or&aniser was informed that the com%an, would +e closed and its wor6force made redundant on that da,. The E/T held that the circumstances %recedin& the relevant radiances in the %resent case in which a %ros%ective %urchaser withdrew from ne&otiations and the +an6 immediatel, a%%ointed a receiver, were s%ecial circumstances which rendered it not reasona+l, %ractica+le to com%l, with the consultation re9uirements. /lthou&h ar&ua+l, not sufficientl, 0s%ecial1 the E/T relied on the similar facts of 2amish +rm(ur. Eoreover, if on the +asis of % arks (- 2(ve the test of whether or not a circumstance is s%ecial is whether it is a sudden, as distinct from a &radual financial deterioration, the %resent case it was ar&ua+l, that the sudden action of the +an6 in sto%%in& further credit and a%%ointin& a received was itself a s%ecial circumstance. The em%lo,er was also held to have ta6en all ste%s as were reasona+l, %ractica+le in all the circumstances. '.!. In GMB v Rankin and 2arris(n ["002] IRLR !"* #$+T& , the fact that the +usiness could not +e sold and that there were no orders were re&arded as common incidents of insolvenc, and not s%ecial circumstances. The res%ondents were a%%ointed as receivers of .awte2, a com%an, with more than 1== em%lo,ees, on 1( @ul, 1 1. The com%an, continued to trade. Dn 1# @ul,, Er Ran6in met Er Easdale, a re%resentative of the reco&nised union, the GE7, and confirmed that he intended to sell the +usiness if a +u,er could +e found. Dn 1 @ul,, the receivers made (( em%lo,ees redundant. Jo advance warnin& was &iven to the union and the consultation re9uirements laid down in s. of the Em%lo,ment Protection /ct 1 '# were not com%lied with. The reason &iven for the redundancies was to trim down the wor6force to ma6e the +usiness easier to sell. In the event, however, no +u,er was found and on 3= /u&ust the receivers decided to close the factor, and made the ma<orit, of the remainin& em%lo,ees redundant. /&ain the, did not &ive advance notice of these redundancies to the union official. The IT held that that there had +een s%ecial circumstances. Dn a%%eal the E/T held that: The Industrial Tri+unal had failed to ma6e clear what it was a+out the circumstances of the %resent case which the, re&arded as 0s%ecial1 in the sense referred to in % arks (- 2(ve of somethin& out of the ordinar, and uncommon such as a sudden disaster or une2%ected insolvenc,. The E/T held that: There is nothing to indicate that there was any sudden disaster or une.pected insolvency. The shedding of employees in order to make a sale of a business more attractive is not something special to a particular case, but is a common incident in any form of receivership or insolvency. ,imilarly, the facts that the business could not be sold and that there were no orders, seem to us to be common incidents of insolvencies, not special circumstances in the required sense. The Industrial Tribunal do not make clear what it is about the circumstances of the present case which they regarded as special. The circumstances referred to by the Industrial Tribunal may support the conclusion that closure was inevitable from the beginning of the receivership, but that is not the issue. In these circumstances, the Industrial Tribunal decision cannot stand. '. . In ReD 2art e;ur, )rinters Ltd and (thers #in iCuidati(n& ["002] IRLR !"6 #%h 4& , it was held that it was not necessar, for the court to decide in that case whether there had +een s%ecial circumstances. >owever, Eorritt @ held $at %ara&ra%h 31): In my 2udgment it is plain that an administration order does not per se render it impracticable for the company employer to comply with those requirements. It may or may not, depending on the

11

other circumstances of the case. Those circumstances would have to be considered in the light of the duties and responsibilities of the administrator. ' combination of those circumstances and the e.istence of an administration order may well give rise to special circumstances within section ((/&0 when neither would when taken in isolation. '.1=. This case ma6es it clear that an em%lo,er +ein& in administration or +ein& insolvent is not %er se a s%ecial circumstance. '.11. In Midd es;r(u3h B(r(u3h %(unci v TG8U [2002] IRLR 332 #$+T 0, an ar&ument that the serious financial difficulties faced +, Eiddles+rou&h 7orou&h Council constituted special circumstances failed. The Council had consulted in relation to wa,s of reducin& the num+ers of em%lo,ees to +e dismissed and miti&atin& the conse9uences of the dismissals, +ut not a+out avoidin& the dismissals. The E/T held that it was not %ossi+le to conceive of circumstances which could +e said to +e s%ecial, renderin& it not reasona+l, %ractica+le to enter into &enuine consultation on avoidin& redundancies as re9uired +, section 1!!$()$a) +ut had sufficient time to consult and did &enuine consult on the matters detailed section 1!!$()$+) and $c). '.1(. In M'= v Re-u3e +ssurance ) c [2003] IRLR 266, the em%lo,er ar&ued +efore the ET that the re9uirements of secrec, im%osed +, the ta6eover code $to which the mer&er in 9uestion was su+<ect) were a s%ecial circumstance. The ET made no findin& on this issue and neither did the E/T e2ce%t to sa, that it could not sim%l, +e assumed that disclosure to, sa, a senior union official on the li6e terms of confidence as would +e a%%lica+le to the com%anies: directors would necessaril, +e so restrictive that it would +e com%letel, useless to him and that it would therefore re%resent a ste% that need not +e ta6en +, the em%lo,er. '.13. In GMB and +MI%U' v Be (it 8a ms e, Limited [200*] IRLR "1 #$+T& , the U* em%lo,er was a su+sidiar, of a UC cor%oration from which it o+tained c.!=K of its wor6. Dn 1! Jovem+er the UC %arent informed the +oard of the U* com%an, that it was no lon&er %re%ared to su%%ort it. Dn (( Jovem+er the U* com%an, was %laced in administration. Redundancies were effected on ( Jovem+er and 14 Decem+er. The ET held that the decision to effect redundancies was not that of the UC %arent com%an,, so that the e2clusion of the statutor, defence did not a%%l,. This was incorrect. 5or the %ur%ose of that e2clusion, and in the li&ht of the lan&ua&e of the Directive, the relevant decision must cause, in the sense of &ivin& rise to the occurrence of, the dismissals, and the %erson ma6in& the decision must contem%late that it will have that conse9uence. It is not necessar, that he should contem%late a %articular num+er of dismissals, or dismissals at a %articular esta+lishment. Dn the facts, the decision +, the UC %arent to discontinue financial su%%ort and su%%l, of wor6 were %otentiall, causative of the dismissals. The case was remitted to the ET for further findin&s of fact. The E/T $Eittin& @) declined to deal with a %oint raised in su+missions as to whether 0contem%lation1 for this %ur%ose includes matters which the %arent com%an, should have contem%lated +ut for its own wilful +lindness: in the unlikely event that any such# circumstances arisethat decision can best be left to the tribunal which has to consider the facts. '.1?. In +micus v GB' T(( in3 Ltd #in administrati(n& [200!] IRLR 613 #$+T& , the em%lo,ers, manufacturers and su%%liers of aluminium %ressin&s to the automotive industr,, had two ma<or customers which to&ether accounted for a+out '=K of the com%an,Is +usiness. In Ce%tem+er and Decem+er (==3, those two customers &ave notice that the, were intendin& to transfer their +usiness overseas. The em%lo,ers reco&nised that without their +usiness, the com%an, would no lon&er +e a+le to o%erate. Dn 1' Decem+er, the, met with two sho% stewards of /micus and &ave them a com%rehensive re%ort of the %ro+lems facin& the com%an, if the customers could not +e %ersuaded to chan&e their minds.

12

Dn (3 @anuar, (==?, there was another meetin& with the union at which it was e2%lained that the com%an, was insolvent and had filed for administration. /n administration order was made on (4 @anuar,, at which sta&e it was antici%ated that there was still si2 to ei&ht wee6sI worth of +usiness on the +oo6s and that continued tradin& would allow an orderl, run-down and &ive an o%%ortunit, for investi&atin& a sale of the +usiness as a &oin& concern. >owever, on 1 5e+ruar,, the administrators were notified that the orders from the survivin& customer were +ein& withdrawn com%letel,. /n, further tradin& +, the com%an, was therefore im%ossi+le and %roduction would have to cease immediatel,. Dn the followin& da,, the em%lo,ees were informed that their em%lo,ment was +ein& terminated forthwith. The union alle&ed that s1!! had not +een com%lied with. The em%lo,er conceded that the %ro%osal to ma6e redundancies had +een on 1 5e+ruar, and that there had +een no consultation after that. The em%lo,er did not ar&ue that there had +een s%ecial circumstances under s.1!!$') and so the issue was the amount of the %rotective award. >owever, the E/T $%er 7urton @) o+served that: It may well be that where it was established that consultation was futile, in the sense of a case in which there was simply no time for consultation to be operated at all, then such defence may be available. ... -e mention it only because it may well be that that is the area in which questions of futility are best addressed. '.1#. Let in Ir(n and 'tee Trades %(n-ederati(n v +'8 2( din3s ) c #in administrative receivershi6& UK$+T:060*:0*:4M [200!] + $R #4& "9* #5ct& t he E/T acce%ted an ar&ument, +ased on the decision of the Court of /%%eal in 'usie Radin v GBM [200*] IRLR *00 and the E/T in Midd es;r(u3h B% v TG8U [2002] IRLR 332> that it was settled law that the futilit, of consultation does not amount to s%ecial circumstances. '.14. In UK %(a Minin3 v .UM [2001] IRLR * #$+T&, the em%lo,ers tried to ar&ue that the floodin& of the mine had created an unforeseen event which ou&ht to +e treated as relievin& the em%lo,ers of the dut, to consult. The tri+unal &ave this ar&ument short shrift, +oth +ecause of the lac6 of evidence su%%ortin& this and +ecause in an, event there had +een a failure to ta6e such ste% towards com%liance as were reasona+l, %ractica+le. The decision of the ET was u%held +, the E/T. '.1'. Dn (1 @anuar, (== the E/T heard the a%%eal in U'+ v .( an. /n ET found that the UC De%artment for Defence had acted in +reach of s.1!! +, failin& to consult with the local civilian wor6force +efore decidin& to close an /merican arm, +ase in >am%shire. It was ar&ued that such consultation in such circumstances would +e futile. The <ud&ment of the E/T has not ,et +een %u+lished. '.1!. C. 1!! $1) refers to the dismissal of (= or more em%lo,ees 0at one esta+lishment1. There is no reference to an esta+lishment in s.1!! $'), which %rovides for the 0s%ecial circumstances1 defence, +ut even so the s%ecial circumstances relied u%on must relate to the esta+lishment which, as a matter of fact, the tri+unal has found to +e the one in which the relevant em%lo,ees are em%lo,ed: Industria %hemica s Limited v Reeks [200*] UK$+T 0096E [200*] + $R #4& "02 #Ju &. ;. C04 T3% %::%CT O: 4OT-C% 041 CO4SULT0T-O4 %<.-R%5 !.1. Jotice and consultation validl, &iven and commenced under s.1!! is not a %iece of elastic which can +e stretched for ever. In @au?ha M(t(rs Limited v T7G8U [2006] IRLR 69*

13

the E/T &ave an illustration. / com%an, in &rave financial difficulties &ives notice to the Union. Consultation +e&ins. / lar&e new order comes in. The need for redundancies is avoided. Consultation ceases. / ,ear later the new order has +een filled, and there is nothin& to re%lace it. /t this %oint the %oint a fresh s.1!! consultation round is re9uired. The ori&inal notice is s%ent. !.(. >owever, in @au?ha itself the facts were different. In @anuar, (==3 notice was &iven to the Cecretar, of Ctate and the Union of ?== %ro%osed redundancies of em%lo,ees on 1( month fi2ed term contracts, to ta6e effect +etween /%ril and Ce%tem+er that ,ear. Consultation too6 %lace. The contracts were e2tended and no redundancies too6 %lace in (==3. In Earch (==?, at the re9uest of the em%lo,er, the DTI e2tended the life of the notice to the Cecretar, of Ctate for Trade and Industr,. The Union was not informed. In Ce%tem+er (==? the em%lo,er issued a fresh notice to the Cecretar, of Ctate. In +reach of s. 1 3, no co%, of it was sent to the Union. In Dcto+er (==? the %arent com%an, announced further lar&e redundancies. 7, this time there were ?4 tem%orar, em%lo,ees left, and the, were dismissed in Jovem+er. The E/T reversed the tri+unal:s findin& that the ori&inal notice and consultation was s%ent, so that there should +e a %rotective award. There was an on&oin& dialo&ue a+out the status and transfer of the tem%orar, wor6ers, and the e2tension of their contracts, from when notice was first &iven to when the last ones were dismissed. It continued seamlessl,. The elastic did not break. The tri+unal had +een wron& to focus on the second notice to the Cecretar, of Ctate. The re9uirements of s.1 3 are se%arate from those under s.1!!.

#. W30T -: T3%R% -S 4O U4-O45 .1. If the em%lo,er does not reco&nise a union, and no em%lo,ee re%resentatives are in %ost alread,, there is an o+li&ation on the em%lo,er to %romote the election of em%lo,ee re%resentatives so that there ma, +e consultation with them, or, failin& that, to inform and consult with individual em%lo,ees: 2(/ard v Mi rise Limited and 'G )rinters [200!] IRLR 1* $a TUPE consultation case).

10. W30T .%R-O1 S3OUL1 B% CO/%R%1 B2 T3% .ROT%CT-/% 0W0R1 5

1=.1. 8here a tri+unal finds a com%laint to +e well-founded it is re9uired to ma6e a declaration

to that effect, and ma, also ma6e a %rotective award. 1= If it decides to ma6e an award, it must identif, the 0%rotected %eriod1, which $a) +e&ins with the earlier of $i) the date on which the first of the relevant redundanc, dismissals ta6es effect and $ii) the date of the award; and $+) must +e of such len&th as the tri+unal determines to +e <ust and e9uita+le in all the circumstances, havin& re&ard to the seriousness of the em%lo,er:s default in com%liance with its o+li&ation to consult; +ut $c) cannot e2ceed = da,s. 11

1=.(. Protective awards are made in res%ect of a class $or classes) of em%lo,ees who have +een
dismissed, or who it is %ro%osed should +e dismissed, as redundant, and in res%ect of whom the em%lo,er failed to com%l, with the re9uirement to consult 1(. T,%icall,, where, as is usuall, the case, the com%laint is %resented +, a trade union, the class will +e those em%lo,ees who are affected +, the redundancies and in res%ect of whom the em%lo,er reco&nised the union for collective +ar&ainin& %ur%oses. The award is 0remuneration1 for the %rotected %eriod. 8hen it comes to +e determined, it is a wee6:s %a, of each em%lo,ee in the defined class $or classes) for each wee6 of the %rotected %eriod, and the a%%ro%riate
1= 11

*+,R-A !.1%) (2) *+,R-A !.1%) (4) 1( *+,R-A !.1%) (3) 14

%ro%ortion of a wee6:s %a, for %art of the %rotected %eriod of less than one wee6. 13 5or this %ur%ose, the usual statutor, rules a%%l, for the determination of a wee6:s %a, 1?, +ut the amount is not limited to the statutor, ma2imum.

1=.3. The tri+unal has discretion to decide whether or not to ma6e a %rotective award, and, if it
decides to do so, how lon& it considers it <ust and e9uita+le to ma6e the %rotected %eriod. Dnce these 9uestions have +een decided, the amount to which each em%lo,ee in the relevant class is entitled under the award de%ends on his or her individual rate of %a,. That amount will not necessaril, corres%ond to an, loss suffered +, the individual em%lo,ees, thou&h an em%lo,ee who continues to wor6 for the em%lo,er durin& the %rotected %eriod is not entitled to %a, under the %rotective award unless he is entitled to +e %aid under his contract of em%lo,ment, or is at least read, and willin& to wor6 unless %revented +, sic6ness or a+sent on holida,. 1#

1=.?. The amount of the %rotective award will not necessaril, corres%ond to an, loss suffered +,
em%lo,ees who ma, +e entitled under it. >owever, it had lon& +een said +, the E/T that the %rotective award was nevertheless com%ensator, rather than %enal in character 14: the +enefit for which em%lo,ees were to +e com%ensated was not merel, their %a, durin& the consultation %eriod, +ut more &enerall, their ri&ht to +e the su+<ect of %ro%er consultation, so that, for e2am%le, if the, all o+tained em%lo,ment at once, and therefore suffered no financial loss at all, the tri+unal could still ma6e a %rotective award. 1' In cases in which there has +een some consultation, +ut the em%lo,er has failed to com%l, full, with the o+li&ation to inform and consult, the tri+unal has often, +efore the <ud&ment of the Court of /%%eal in the case mentioned +elow, followed the a%%roach of startin& with the %eriod of consultation which was re9uired in the %articular case, deductin& the %eriod over which an, real consultation too6 %lace, and assumin& that the %rotected %eriod should +e the difference +etween the two, +ut ad<ustin& it if the circumstances ma6e that a%%ro%riate. 1!

1=.#. The %rotected %eriod mi&ht +e more than the difference +etween these two %eriods, and in a
suita+le case the ma2imum of = da,s, where the em%lo,er:s disre&ard of the o+li&ation to consult was %articularl, +latant.1 In the first case on this su+<ect to reach it, (= the Court of /%%eal said that this is incorrect: the purpose of the award is to provide a sanction for breach by the employer of the obligations in s.%&&8 it is not to compensate the employees for loss which they have suffered in consequence of the breach. $%er Gi+son .@ at %ara&ra%h ?#). The sanction ma, +e severe: in the leadin& case, the estimated cost of the %rotective award was some H(#=,===.

1=.4. The tri+unal has a wide discretion to do what is <ust and e9uita+le in all the circumstances,
+ut the focus should +e on the em%lo,er:s default, not the loss to em%lo,ees. (1 The default ma, var, in seriousness from the technical to a com%lete failure to %rovide an, of the
13 1?

*+,R-A !.1)0 *+,R-A !.1)0 (5) 1# *+,R-A !.1)0 (4) 14 Talke Fashions v Amalgamated Society of Textile Workers and Kindred Trades [1977] !"! #$9 1' S%illers French &'oldings( "imited v )S*AW [1979] !"! ##9 1! * i! approac "a! #a.oure$ by t e /A* in S%illers French 'oldings "imited v )S*AW [1979] !"! ##9, o# " ic -A in S+sie !adin generally appro.e$. * e #act t at t e ma0imum #or t e protecte$ perio$ i! )0 $ay!, " ic i! al!o t e longe!t o# t e perio$! o.er " ic con!ultation i! re1uire$, in$icate! t at t ere ! oul$ generally be a relation! ip bet"een t e perio$ re1uire$ in t e particular ca!e, t e perio$ o.er " ic any real con!ultation too2 place, an$ t e protecte$ perio$. 1 T,-W) v .ation/ide 'a+lage "imited [1970] !"! 11# (= Susie Radin Limited v GMB and Others [2004] IRLR 400 15

re9uired information and to consult. The deli+erateness of the failure ma, +e relevant, as ma, the availa+ilit, to the em%lo,er of le&al advice on the o+li&ations to inform and consult. >ow it assesses the len&th of the %rotected %eriod is a matter for the tri+unal, +ut the %ro%er a%%roach in a case in which there has +een no consultation is to start with the ma2imum %eriod and reduce it, onl, if there are miti&atin& circumstances <ustif,in& a reduction, to the e2tent that the tri+unal considers reasona+le.((

1=.'. The fact that in a %articular case it mi&ht have +een futile to conduct an, consultation, while
it mi&ht lead a tri+unal to find that the dismissal of the redundant wor6ers was not unfair, (3 should not lead it to ma6e no %rotective award, or onl, a nominal one. (? >owever, the 0miti&atin& circumstances1 <ustif,in& a reduction ma, include the fact that information was %rovided, and consultation with the union too6 %lace, +efore the %ro%osal to ma6e redundancies had cr,stallised.(# / tri+unal is not re9uired to reduce the ma2imum %eriod to reflect what it considers to +e 0minimal1 consultation a+out 0mar&inal issues1 where there had +een deli+erate dece%tion +, the em%lo,er a+out the reason for the redundancies: UK %(a Minin3 Limited v .UM and B+%M [2001] IRLR * #$+T&.

1=.!. / 9uestion u%on which o%inion remained divided after the <ud&ment of the Court of
/%%eal(4 was whether, when it referred to the 0ma2imum %eriod1 as a %ro%er startin& %oint in cases in which there has +een no consultation, it meant $a) the ma2imum %eriod over which, in the individual case, consultation is re9uired $which will of course var, (' with the num+er of those affected +, the redundancies from = da,s to 3= da,s) or $+) the overall ma2imum of = da,s. It is now clear that the latter is correct. (!

1=. . It is wron& to assume that +ecause the em%lo,er has +ecome insolvent, a %rotective award
would +e ineffective as a sanction, and should not +e made. The sanction is meant to have a deterrent effect, to +e <ud&ed +, reference to time of the failure to consult, and not an, later time.(
(1

there may be insurmountable problems were it relevant to consider the consequences to individual employees of the failure to consult. Suppose that for half the employees of the relevant description there were no adverse consequences. How should that affect the length of the protected period? Given that there is but one award in respect of all within that description, it might be thought that to halve the award would be un ust and inequitable to those for whom the consequences were adverse and would be overgenerous to those for whom there were no adverse consequences.! per &eter 3ib!on ,4 in S+sie !adin "imited v -23 and 4thers [5$$1] !"! 1$$ &6A( (( &er &eter 3ib!on ,4 in S+sie !adin "imited v -23 and 4thers [5$$1] !"! 1$$ &6A( (3 5n t e principle in 7olkey v A8 *ayton Services "imited [1900] A6 #11 or, no", un$er /RA !. )%A (2) (? &er &eter 3ib!on ,4 in S+sie !adin "imited v -23 and 4thers [5$$1] !"! 1$$ &6A( citing "it appro.al t e $eci!ion on t at point o# t e /A* in 2iddles9ro+gh 3oro+gh 6o+ncil v T,-W) [5$$5] !"! ##5 (# Amic+s v -3S Tooling "imited &in Administration( [5$$:] !"! ;0#< 6o"e.er, in "eicestershire 66 v )nison [5$$:] !"! 95$= t e /A* el$ t at an /* ! oul$ not ta2e into account any mitigating #actor! pre7$ating t e obligation to con!ult8 t i! con#lict! "it Amic+s v -3S *ooling " ic "a! not cite$ in "eicestershire 6o+nty -ouncil. 6o"e.er, " en t e appeal "a! ear$ in "eicestershire 66 &[5$$;] !"! 01$( -ourt o# Appeal $eci$e$ t e point on a $i##erent #actual ba!i! to t e /A* an$ !o t e point remain! open. (4 9ecau!e S+sie !adin "a! a ca!e in " ic , becau!e o# t e number o# re$un$ancie!, t e re1uire$ con!ultation perio$ "a! in any e.ent )0 $ay!. (' *+,R-A !.1%% (1A) (! '+tchins and others v 7ermacell Finesse "imited &in Administration( )K8AT>$#:$>?7@ [5$$0] All 8! &*( 115 &Aan( ( Smith v 6herry "e/is "imited [5$$:] !"! 0; &8AT( 16

1=.1=.

The Recou%ment Re&ulations3= a%%l, to %a,ments made under a %rotective award. 8here a tri+unal ma6es a %rotective award, the em%lo,er is o+li&ed to %rovide to the De%artment of 8or6 and Pensions %articulars of the names, addresses etc. and dates of termination of em%lo,ment of the em%lo,ees to whom it a%%lies. 31 The amount su+<ect to recou%ment is the lesser of $a) the sum accrued due to each such em%lo,ee durin& the %rotected %eriod and +efore the em%lo,er has %rovided those details, and $+) the amount %aid +, wa, of @o+see6er:s /llowance or Income Cu%%ort durin& that %eriod. 3(

11. .ROT%CT-/% 0W0R1S 041 -4SOL/%4C2 11.1. The lia+ilit, to %a, a %rotective award is %rova+le in the li9uidation of the res%ondent former em%lo,ee. It is a 0... de+t or lia+ilit, to which the com%an, ma, +ecome su+<ect after Athe date on which the com%an, &oes into li9uidationB +, reason of an, o+li&ation incurred +efore that date1 within Rule 13.1( $1) $+) of the Insolvenc, Rules 1 !4. The 0o+li&ation1 is that the em%lo,er should inform and consult, and the %rotective award is the measure +, which that o+li&ation is enforced. 11.(. Cuch enforcement must, as a matter of EU law, +e effective, %ro%ortionate and dissuasive. This could onl, +e so if visited on the em%lo,er rather than the Cecretar, of Ctate. It is contin&ent u%on the tri+unal:s ma6in& the %rotective award, +ut, thou&h the tri+unal has a <udicial discretion, it could, followin& 'usie Radin, onl, rationall, e2ercise that discretion to ma6e a ma2imum award where there had +een a total failure to consult and there were no miti&atin& circumstances: 2aine v 4a, [2001] IRLR 6*2 #%+&. 1 . .O-4TS O: =UR-S1-CT-O4 041 .ROC%1UR% 8ho is the claimant G

1(.1. There is a %rescri+ed order of com%etent claimants33, as follows:

$a) if a trade union is reco&nised, then onl, it ma, com%lain; $+) if there are 0em%lo,ee re%resentatives1 $see +elow), then onl, the, ma, com%lain; $c) onl, if neither of the a+ove a%%lies, individual affected em%lo,ees ma, com%lain. / trade union, if reco&nised in res%ect of a class of em%lo,ees, ma, com%lain of failure to consult on +ehalf of that class, +ut not on +ehalf of other em%lo,ees, and a %rotective award made on the a%%lication of the union does not enure for the +enefit of em%lo,ees other than those in res%ect of whom it was reco&nised. Dther em%lo,ees must ma6e their own claim, althou&h there is no difficult, in a claim +ein& made simultaneousl, +, a trade union and individual em%lo,ees: T7G8U v Brauer %( e, Limited [2009] I%R 226. Descri%tion of class of em%lo,ees 1(.(. TU.RC/ s. 1! $3): / %rotective award is an award in res%ect of one or more descri%tions of em%lo,ees $a) who have +een dismissed as redundant, or who it is %ro%osed to dismiss as redundant, and
3=

&rotection o# /mployment (Recoupment o# 4ob!ee2er:! Allo"ance an$ (ncome ;upport) Regulation! 1))6 (<Recoupment Regulation!=) 31 Reg 6 Recoupment Regulation! 3( Reg % Recoupment Regulation! 33 9y t e combine$ e##ect! o# *+,R-A !!.1%% (19) an$ 1%) (1) 17

$+) in res%ect of whose dismissal or %ro%osed dismissal the em%lo,er has failed to com%l, with the re9uirement of s.1!!. 1(.3. It is necessar, for the tri+unal to ma6e a clear findin& of fact as to the descri%tion$s) of em%lo,ees in res%ect of whom the %rotective award is to +e made, and for the descri%tion$s) to +e set out clearl, in the <ud&ment, %articularl, since $unless the <ud&ment is reserved) the reasons for it, includin& the findin&s of fact, will +e &iven orall, at the end of the hearin&, +ut $unless within the %rescri+ed %eriod of 1? da,s a %art, then re9uests reasons), the %arties and $for recou%ment %ur%oses) the 7enefits /&enc, will have onl, the <ud&ment itself to &uide them. / t,%ical descri%tion is all hourly paid staff employed by the respondent at its 9ewtown factory on date#. Cometimes em%lo,ees are dismissed in tranches over a %eriod. In such cases, the %rotected %eriod +e&in when the first of the dismissals ta6es effect. This means that those dismissed later will have continued in $%aid) em%lo,ment for lon&er, and in some cases for most or all of the %rotected %eriod. 1(.?. In 2ar-(rd 7 5rs v 'ecretar, (- 'tate -(r Trade and Industr, UK$+T:03"3:09:L+E [2001] + $R#4& *3" #+6r&> the %rotective award was made in favour of GE7 trade union re%resentin& manual wor6ers in res%ect of those em%lo,ees 0dismissed on 3 Ea, or # Ea, (==41. It was held that the award could not +enefit manual wor6s not mem+ers of the union, dismissed on other dates in Ea, (==4, and that as matters stood such wor6ers had no remed, a&ainst the Cecretar, of Ctate; +ut that such wor6ers could a%%l, to the em%lo,ment tri+unal to +e <oined out of time as %arties to the GE7 case, for the decision in the GE7 case to +e reviewed so as to cover dismissals on other dates, and for an, conse9uent %rotective award to +e recovera+le as a de+t from the Cecretar, of Ctate. 1(.#. It ma, seem counter-intuitive that those dismissed at the end should receive the same amount as those dismissed at the start, whose loss was &reater, +ut this was the outcome in %ans/ick %(untr, =((ds ) c v Bea and 5thers [2009] I%R 10"> UK$+T:0222: . /n attem%t to ar&ue the contrar, +, reference to s.1 =$?) failed. Protective awards are %enal rather than com%ensator, in character. Those re%resentin& em%lo,ees in such cases sometimes as6 the tri+unal, for the avoidance of dou+t, to include in its <ud&ment a declaration that each em%lo,ee within the defined class is entitled to an award +, reference to the full %rotected %eriod, irres%ective of the date of termination of his em%lo,ment. 1(.4. Dnce an award has +een made, the em%lo,er is re9uired within 1= da,s to send to the 7enefits /&enc, the name, address and Jational Insurance num+er, and date of dismissal $or %ro%osed dismissal) of ever, em%lo,ee to who it relates. The 7enefits /&enc, is then re9uired, within (1 da,s, to serve recou%ment notices on an, em%lo,ees %art of whose award is to +e recou%ed. The em%lo,er is then re9uired to %a, the amount of the award $su+<ect to recou%ment) to the em%lo,ees whom it has identified as entitled, and in %ractice it is &enerall, at this %oint that em%lo,ees who claim to have +een omitted identif, themselves. Their remed, is to a%%l, to the tri+unal under s.1 ($1) of TU.RC/, contendin& that the, are within the descri%tion to which the award relates, +ut that the em%lo,er has failed to %a, the award to them. Descri%tion, not list 1(.'. The award is made +, reference to a descri%tion of em%lo,ees, not a list of names. Eost %rotective award claims are +rou&ht +, trade unions, and the union sometimes %rovides a list of those whom it considers to +e within the affected class. Even if it does, the <ud&ment should identif, the descri%tion of em%lo,ees. The union:s list ma, +e inaccurate $it ma, omit non-union mem+ers, or mem+ers whose union su+scri%tions are in arrears etc). Cimilarl,, some %rotective award cases are listed alon& with other claims +, individual

1%

em%lo,ees: for unfair dismissal, redundanc, %a,ments, etc. In such cases, the <ud&ment must clearl, distin&uish +etween the %rotective award, which is made in res%ect of a descri%tion of em%lo,ees, and an, awards made in favour of individual em%lo,ees. Trade union cases

1(.!. /n inde%endent trade union is &iven the ri&ht to com%lain of an, failure relatin& to union
re%resentatives3?, +ut union re%resentatives are the a%%ro%riate re%resentatives of em%lo,ees if the em%lo,ees are of a descri%tion in res%ect of which an inde%endent trade union is reco&nised3#. 0Reco&nition1 means reco&nition for collective +ar&ainin& %ur%oses 34, which is a 9uestion of fact. /lthou&h it ma, +e the su+<ect of e2%ress formal a&reement $and ver, occasionall, of a declaration +, the C/C 3'), it is often a matter of inference from the conduct of the %arties. 8hilst an em%lo,er sometimes reco&nises a union for the %ur%ose of +ar&ainin& onl, on +ehalf of its own mem+ers, the decline of the closed sho% has made this unusual. Euch more often, the union will +e reco&nised in res%ect of a class of em%lo,ees includin&, +ut not limited to, its mem+ers.

1(. . Those employees in respect of which the trade union is recognised, namely the
engineering shop floor employees, do not all have to be members of the union. I have no information as to whether they were, or were not, all members of the union in this case, but the union is entitled to represent them if they are employees in respect of which the union is recognised3! Tri+unals should +e war, of definin& the class +, reference to union mem+ershi%. If a union a%%lies for a %rotective award, the tri+unal cannot, on that a%%lication, ma6e an award in favour of em%lo,ees other than those in res%ect of whom the union was reco&nised.3 Em%lo,ee re%resentatives cases 1(.1=.Protective award claims ma, also +e made +, 0em%lo,ee re%resentatives1 $either a%%ointed or elected +, the affected em%lo,ees for other %ur%ose, or elected +, them s%ecificall, for the %ur%ose of consultation: the choice +etween the two is that of the em%lo,er) ?=. In such cases the tri+unal must in its findin&s of fact identif, the descri%tion of em%lo,ees in res%ect of whom the, were a%%ointed or elected. /ffected"dismissed em%lo,ees cases

1(.11.

If $+ut onl, if) no trade union was reco&nised and there are no em%lo,ee re%resentatives?1, a %rotective award claim ma, +e made +, any of the affected employees or any of the employees who have been dismissed as redundant .?( /lthou&h the com%laint ma, +e made +, an, such em%lo,ee, the tri+unal is li6el,, at the interlocutor, sta&e, to have &rou%ed to&ether individual claims arisin& out of the same redundanc, e2ercise. >owever, even if the num+er is small and it seems clear that all affected em%lo,ees are claimants, the

3? 3#

*+,R-A !. 1%) (1) (c) *+,R-A !. 1%% (19) (a) 34 *+,R-A !. 17% (3) 3' +n$er *+,R-A ;c e$ule A1 3! T,-W) v 3ra+er 6oley "imited [5$$7] !"! 5$7 &8ATB 3 T,-W) v 3ra+er 6oley * e /A* ga.e lea.e to appeal to t e -ourt o# Appeal ?= *+,R-A !. 1%% (19) ?1 .orthgate '! "td v 2ercy [5$$0] !"! 555 &6A( > ? ere appropriate repre!entati.e! are in place, only t ey can bring a claim #or a protecti.e a"ar$ #or #ailure to con!ult. An in$i.i$ual a! no !tan$ing to bring a per!onal complaintF ?( *+,R-A !. 1%) (1) (b) 1)

award must still +e in res%ect of a descri%tion of em%lo,ees, rather than a list of names. If a trade union a%%lies for a %rotective award, the tri+unal cannot, on that a%%lication, ma6e an award in favour of em%lo,ees other than those in res%ect of whom the union was reco&nised, even if the individuals were mem+ers of the union ?3 $althou&h there would +e nothin& to %revent the union from includin& two claims in its a%%lications, one on +ehalf of those in res%ect of whom it was reco&nised and another as re%resentative in the %roceedin&s of union mem+ers in res%ect of whom it was not reco&nised, +ut who were also affected em%lo,ees). The %rotected %eriod

1(.1(.

The %rotective award orders the em%lo,er 0to pay remuneration for the protected period??, which +e&ins with the earlier of $i) the date on which the first of the dismissals ta6es effect and $ii) the date of the award ?#, +ut shall not e2ceed = da,s. The <ud&ment must identif, the start date and the len&th of the %eriod $e2%ressed in da,s). The tri+unal must have made the necessar, findin&s of fact, includin& an, as to the %eriod, if an,, over which consultation did in fact ta6e %lace, and an, s%ecial circumstances which rendered com%liance not reasona+l, %ractica+le or which caused the tri+unal to miti&ate the %enal effect of the award. Time, not mone,

1(.13.

/ %rotective award is an order that the em%lo,er %a, remuneration for the %rotected %eriod. It is not necessar, or a%%ro%riate for it to state the amount of remuneration, or the method of calculation of it. If the em%lo,er fails to %a, the correct amount, individual em%lo,ees ma, then com%lain to the tri+unal.?4 Recou%ment

1(.1?.

The Recou%ment Re&ulations?' a%%l, to %a,ments made under a %rotective award. 8here a tri+unal ma6es a %rotective award, the em%lo,er is o+li&ed to %rovide to the 7enefits /&enc, %articulars of the names, addresses etc. and dates of termination of em%lo,ment of the em%lo,ees to whom it a%%lies. ?! The amount su+<ect to recou%ment is the lesser of $a) the sum accrued due to each such em%lo,ee durin& the %rotected %eriod and +efore the em%lo,er has %rovided those details, and $+) the amount %aid +, wa, of @o+see6er:s /llowance or Income Cu%%ort durin& that %eriod. ? 8here the %rotective award is 0announced1 in the %resence of the em%lo,er or its re%resentative, the tri+unal is re9uired to e2%lain to them the em%lo,er:s duties and the effect of the recou%ment %rovisions. #= In addition, an, decision $the lan&ua&e %re-dates the new Rules) to ma6e a %rotective award shall contain a statement advisin& the em%lo,er of these matters.#1

1$.

TU.% 0S CO6.0R%1 W-T3 S.1;; TULRC0

?3 ??

T,-W) v 3ra+er 6oley * e /A* ga.e lea.e to appeal to t e -ourt o# Appeal *+,R-A !. 1%) (3) ?# *+,R-A !. 1%) (4) ?4 *+,R-A !. 1)2 (1) ?' Recoupment Regulation! ?! Reg 6 Recoupment Regulation! ? Reg % Recoupment Regulation! #= Reg 15(2)($) Recoupment Regulation! #1 Reg 5(2)(b) Recoupment Regulation! 20

13.1.

Cimilar %rovisions to those contained in ss.1!! to 1 ( of TU.RC/ are to +e found in Re&ulations 13 to 14 of the Transfer of Underta6in&s $Protection of Em%lo,ment) Re&ulations $CI (==4"(?4). The o+li&ation to consult relates to em%lo,ees of the transferor or the transferee who ma, +e affected +, the transfer or ma, +e affected +, measures ta6en in connection with it. References to em%lo,er are to +e construed accordin&l, $Re&ulation 13$1)). Einimum num+ers

13.(.

13.3.

C.1!! onl, a%%lies where the em%lo,er is %ro%osin& to dismiss as redundant (= or more em%lo,ees at one esta+lishment within a %eriod of = da,s or less. There are no minimum num+ers of affected em%lo,ees with TUPE transfers. Timin&

13.?.

C.1!! of TU.RC/ contains detailed %rovisions a+out timin&, re9uirin& that consultation ta6es %lace 0in &ood time1, and in an, event at least = da,s +efore the first of the dismissals ta6es effect where the em%lo,er is %ro%osin& to dismiss 1== or more em%lo,ees, and otherwise 3= da,s. 7, com%arison, Re&ulation 13 $() merel, re9uires information to +e %rovided 0lon& enou&h +efore a relevant transfer to ena+le the em%lo,er of an, affected em%lo,ees to consult the a%%ro%riate re%resentatives of an, affected em%lo,ees1. Em%lo,ee Re%resentatives

13.#.

13.4.

/s with s.1!!, the o+li&ation is to consult with a%%ro%riate re%resentatives. The %rovisions relatin& to the selection of a%%ro%riate re%resentatives and their election where necessar, are identical to those contained in s.1!!. Provision of information to a%%ro%riate re%resentatives

13.'.

/s with s.1!!$?) there is a re9uirement that the em%lo,ee re%resentatives +e %rovided with certain information. In relation to TUPE this includes the facts of the transfer, the date, the %ro%osed reasons, the le&al economic and social im%lications, measures he envisa&es ta6in& in res%ect of the transfer $or if there are none, that there are none) $Re&ulation 13$()). Consultation

13.!.

The consultation %rovisions themselves are a little different. /lthou&h the aim seems to +e similar $s.1!!$() refers to consultation +ein& underta6en +, the em%lo,er with a view to reaching agreement with the appropriate representatives and Re&ulation 13$4) %rovides that re%resentatives +e consulted with a view to seeking their agreement to the intended measures), unli6e the %osition under s.1!!$(), Re&ulation 13 does not contain a list of s%ecific issues in relation to which an em%lo,er must consult. >owever, unli6e s.1!!, Re&ulation 13$') %rovides that, in the course of consultation the em%lo,er shall $a) consider an, re%resentations made +, a%%ro%riate re%resentatives, and $+) re%l, to those re%resentations and, if he re<ects an, of those re%resentations, state his reasons. C%ecial Circumstances

21

13. .

/s with s.1!!$'), Re&ulation 13$ ) allows em%lo,ers, where full com%liance is not reasona+l, %ractica+le, merel, to ta6e such ste%s as are 0reasona+l, %ractica+le in the circumstances1. The second %art of s.1!!$') is re%licated in Re&ulation 1#$4). In addition, Re&ulation 13$1() e2%ressl, states in relation to all duties im%osed +, Re&ulation 13, that the duties a%%l, irres%ective of whether the decision resultin& in the relevant transfer is ta6en +, the em%lo,er or a %erson controllin& the em%lo,er. 5ailure to inform or consult

13.1=. 8here there has +een a failure to inform or consult, TUPE contains similar %rovisions to those found in TU.RC/ in terms of the ma6in& of a declaration and an order for a %rotective award. 13.11. Under +oth s.1! $() and Re&ulations 1#$') and $!), an em%lo,ment tri+unal ma, ma6e a declaration that there has +een a failure to consult a%%ro%riatel,. C.1! $3) and $?) %rovide for a %rotective award to +e made in res%ect of one or more descri%tions of em%lo,ees. The %rotective award is remuneration for the %rotected %eriod. The %rotected %eriod +e&ins with the earlier of the date on which the first of the dismissals ta6es effect or the date of the award, is of such len&th as the tri+unal determines to +e <ust and e9uita+le in all the circumstances havin& re&ard to the seriousness of the em%lo,er:s default, +ut must not e2ceed = da,s. Re&ulations 1#$') and $!) re9uire 0a%%ro%riate com%ensation to such descri%tions of affected em%lo,ees as ma, +e s%ecified in the award1. 'ppropriate compensation means such sum not e.ceeding thirteen week1s pay for the employee in question as the tribunal considers 2ust and equitable having regard to the seriousness of the failure of the employer to comply with his duty $Re&ulation 14$3)). 13.1(. It was s%ecificall, held +, the E/T in '/eetin v %(ra Racin3 [2006] IRLR 2!2 that Parliament could not have intended that the a%%roach to the assessment of com%ensation under TUPE could +e an, different from the a%%roach under TU.RC/. 14. 1?.1. %URO.%04 WOR>S COU4C-LS Em%lo,ers with o%erations outside of the U* should +e aware that the, ma, have additional o+li&ations under the Euro%ean 8or6s Council Directives $ ?"?#"EC as e2tended +, '"'?"EC), which are im%lemented in the U* +, the Transnational Information and Consultation of Em%lo,ees Re&ulations, CI 1 "33(3. $J7 The EC has %ro%osed that the Directives +e consolidated and revised $CDE$=!) ?1 , ( @ul, (==!). Generall, s%ea6in&, a U*-+ased multinational enter%rise which em%lo,s 1,=== or more em%lo,ees with at least 1#= em%lo,ees in each of two or more EE/ mem+er states ma,, and u%on due demand must, esta+lish a Euro%ean 8or6s Council $0E8C1) or some other suita+le %rocedure for consultin& its em%lo,ees at transnational level a+out matters of transnational concern. The information and consultation %rocedures shall cover all esta+lishments or underta6in&s located within mem+er states. The information to +e %rovided to em%lo,ees: re%resentatives shall relate in %articular to transnational 9uestions which significantly affect workers1 interests $/rticles 1 and 4, EU Directive ?"?#"EC). 7roadl,, the com%etence of a statutor, Euro%ean 8or6s Council $+ein& the default model) is limited to information and consultation on matters which concern the communit,-scale underta6in& or communit,-scale underta6in&s as a whole or at least two of its esta+lishments

1?.(.

1?.3.

1?.?.

22

or &rou% underta6in&s situated in different Eem+er Ctates $Para&ra%h1 of the /nne2 to EU Directive ?"?#"EC, Para&ra%h 4 of the Cchedule to CI 1 "33(3). 1?.#. Para&ra%h ' of the Cchedule to CI 1 "33(3 %rovides for there to +e annual meetin&s. >owever this is su+<ect to %ara&ra%h !$1) which %rovides that -here there are e.ceptional circumstances affecting the employees1 interests to a considerable e.tent, particularly in the event of relocations, the closure of establishments of undertakings or collective redundancies, the select committee, or, where no such committee e.ists, the 6uropean -orks !ouncil shall have the right to be informed. It shall have the ri&ht to meet with the central mana&ement committee or other more a%%ro%riate level so as to +e informed and consulted on measures si&nificantl, affectin& em%lo,ees: interests. >owever, %ara&ra%h !$?) further %rovides that 0The e2ce%tional information and consultation meetin& referred to in su+-%ara&ra%h $1) of this %ara&ra%h shall not affect the %rero&atives of the central mana&ement1.

:iles 5owell ;ld ,quare !hambers )< ;ctober )<<(

23

0??end*@ 1 %@)ra&)s from TULRC0

s. %&& /%08 -here an employer is proposing to dismiss as redundant )< or more employees at one establishment within a period of (< days or less, the employer shall consult about the dismissals all persons who are appropriate representatives of any of the employees who may be affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals. s. %&& /%'08 The consultation shall begin in good time and in any event* /a0 where the employer is proposing to dismiss %<< or more employees as mentioned in subsection /%0, at least (< days, and /b0 otherwise, at least =< days, before the first of the dismissals takes effect. s. %&& /%>08 ?or the purposes of this section, the appropriate representatives of any affected employees are* /a0 if the employees are of a description in respect of which an independent trade union is recognised, representatives of that trade union, or /b0 in any other case, whichever of the following employee representatives the employer chooses8* /i0 employee representatives appointed or elected by the affected employees otherwise than for the purposes of this section, who /having regard to the purposes for and the method by which they were appointed or elected0 have authority from those employees to receive information and to be consulted about the proposed dismissals on their behalf+ /ii0 employee representatives elected by the affected employees, for the purpose of this section, in an election satisfying the requirements of section %&&' /%0. s. %&& /)08 The consultation shall include consultation about ways of* /a0 avoiding the dismissals, /b0 reducing the numbers of employees to be dismissed, and /c0 mitigating the consequences of the dismissals, and shall be undertaken by the employer with a view to reaching agreement with the appropriate representatives. s. %&& /=08 In determining how many employees an employer is proposing to dismiss as redundant no account shall be taken of employees in respect of whose proposed dismissals consultation has already begun. s. %&& /708 ?or the purposes of the consultation the employer shall disclose in writing to the appropriate representatives* /a0 the reasons for his proposals, /b0 the numbers and descriptions of employees whom it is proposed to dismiss as redundant, /c0 the total number of employees of any such description employed by the employer at the establishment in question, /d0 the proposed method of selecting the employees who may be dismissed, /e0 the proposed method of carrying out the dismissals,, with due regard to any agreed procedure, including the period over which any dismissals are to take effect, and /f0 the proposed method of calculating the amount of any redundancy payments to be made /otherwise than in compliance with an obligation imposed by or by virtue of any enactment0 to employees who may be dismissed.

24

s. %&& /@08 That information shall be given to each of the appropriate representatives by being delivered to them, or sent by post to an address notified by them to the employer, or in the case of representatives of a trade union sent by post to the union at the address of its head or main office. s. %&& /A08 If in any case there are special circumstances which render it not reasonably practicable for the employer to comply with a requirement of subsection /%'0, /)0 or /70, the employer shall take all such steps towards compliance with that requirement as are reasonably practicable in those circumstances. -here the decision leading to the proposed dismissals is that of a person controlling the employer /directly or indirectly0 a failure on the part of that person to provide information to the employer shall not constitute special circumstances.. s. %&( /%08 -here an employer has failed to comply with a requirement of section %&& or section %&&', a complaint may be presented to an employment tribunal on that ground. deals with identity of party who may complain# ,. %&( /)08 If the tribunal finds the complaint well founded it shall make a declaration to that effect and may also make a protective award. ,. %&( /=08 ' protective award is an award in respect of one or more descriptions of employees B /a0 who have been dismissed as redundant, or who it is proposed to dismiss as redundant, and /b0 in respect of whose dismissal or proposed dismissal the employer has failed to comply with the requirement of section %&&, ordering the employer to pay remuneration for the protected period. ,. %&(/70 The protected period B /a0 begins with the date on which the first of the dismissals to which the complaint relates takes effect, or the date of the award, whichever is the earlier, and /b0 is of such length as the tribunal determines to be 2ust and equitable in all the circumstances having regard to the seriousness of the employer1s default in complying with the requirement of section %&&+ but shall not e.ceed (< days.

25

0??end*@ %@)ra&)s from TU.%

%= $uty to inform and consult representatives /%0 In this regulation and regulations %7 and %@ references to affected employees, in relation to a relevant transfer, are to any employees of the transferor or the transferee /whether or not assigned to the organised grouping of resources or employees that is the sub2ect of a relevant transfer0 who may be affected by the transfer or may be affected by measures taken in connection with it+ and references to the employer shall be construed accordingly. /)0 4ong enough before a relevant transfer to enable the employer of any affected employees to consult the appropriate representatives of any affected employees, the employer shall inform those representatives of * /a0 the fact that the transfer is to take place, the date or proposed date of the transfer and the reasons for it+ /b0 the legal, economic and social implications of the transfer for any affected employees+ /c0 the measures which he envisages he will, in connection with the transfer, take in relation to any affected employees or, if he envisages that no measures will be so taken, that fact+ and /d0 if the employer is the transferor, the measures, in connection with the transfer, which he envisages the transferee will take in relation to any affected employees who will become employees of the transferee after the transfer by virtue of regulation 7 or, if he envisages that no measures will be so taken, that fact. /=0 ?or the purposes of this regulation the appropriate representatives of any affected employees are * /a0 if the employees are of a description in respect of which an independent trade union is recognised by their employer, representatives of the trade union+ or /b0 in any other case, whichever of the following employee representatives the employer choosesC /i0 employee representatives appointed or elected by the affected employees otherwise than for the purposes of this regulation, who /having regard to the purposes for, and the method by which they were appointed or elected0 have authority from those employees to receive information and to be consulted about the transfer on their behalf+ /ii0 employee representatives elected by any affected employees, for the purposes of this regulation, in an election satisfying the requirements of regulation %7/%0. /70 The transferee shall give the transferor such information at such a time as will enable the transferor to perform the duty imposed on him by virtue of paragraph /)0/d0. /@0 The information which is to be given to the appropriate representatives shall be given to each of them by being delivered to them, or sent by post to an address notified by them to the employer, or /in the case of representatives of a trade union0 sent by post to the trade union at the address of its head or main office. /D0 'n employer of an affected employee who envisages that he will take measures in relation to an affected employee, in connection with the relevant transfer, shall consult the appropriate representatives of that employee with a view to seeking their agreement to the intended measures. /A0 In the course of those consultations the employer shallC /a0 consider any representations made by the appropriate representatives+ and /b0 reply to those representations and, if he re2ects any of those representations, state his reasons.

26

/&0 The employer shall allow the appropriate representatives access to any affected employees and shall afford to those representatives such accommodation and other facilities as may be appropriate. /(0 If in any case there are special circumstances which render it not reasonably practicable for an employer to perform a duty imposed on him by any of paragraphs /)0 to /A0, he shall take all such steps towards performing that duty as are reasonably practicable in the circumstances. /%<0 -here * /a0 the employer has invited any of the affected employee to elect employee representatives+ and /b0 the invitation was issued long enough before the time when the employer is required to give information under paragraph /)0 to allow them to elect representatives by that time, the employer shall be treated as complying with the requirements of this regulation in relation to those employees if he complies with those requirements as soon as is reasonably practicable after the election of the representatives. /%%0 If, after the employer has invited any affected employees to elect representatives, they fail to do so within a reasonable time, he shall give to any affected employees the information set out in paragraph /)0. /%)0 The duties imposed on an employer by this regulation shall apply irrespective of whether the decision resulting in the relevant transfer is taken by the employer or a person controlling the employer. . %7 6lection of employee representatives /%0 The requirements for the election of employee representatives under regulation %=/=0 are thatC /a0 the employer shall make such arrangements as are reasonably practicable to ensure that the election is fair+ /b0 the employer shall determine the number of representatives to be elected so that there are sufficient representatives to represent the interests of all affected employees having regard to the number and classes of those employees+ /c0 the employer shall determine whether the affected employees should be represented either by representatives of all the affected employees or by representatives of particular classes of those employees+ /d0 before the election the employer shall determine the term of office as employee representatives so that it is of sufficient length to enable information to be given and consultations under regulation %= to be completed+ /e0 the candidates for election as employee representatives are affected employees on the date of the election+ /f0 no affected employee is unreasonably e.cluded from standing for election+ /g0 all affected employees on the date of the election are entitled to vote for employee representatives+ /h0 the employees entitled to vote may vote for as many candidates as there are representatives to be elected to represent them or, if there are to be representatives for particular classes of employees, may vote for as many candidates as there are representatives to be elected to represent their particular class of employee+ /i0 the election is conducted so as to secure thatC /i0 so far as is reasonably practicable, those voting do so in secret+ and /ii0 the votes given at the election are accurately counted. /)0 -here, after an election of employee representatives satisfying the requirements of paragraph /%0 has been held, one of those elected ceases to act as an employee representative and as a result any affected employees are no longer represented, those employees shall elect another representative by an election satisfying the requirements of paragraph /%0/a0, /e0, /f0 and /i0. %@ ?ailure to inform or consult

27

/%0 -here an employer has failed to comply with a requirement of regulation %= or regulation %7, a complaint may be presented to an employment tribunal on that groundC /a0 in the case of a failure relating to the election of employee representatives, by any of his employees who are affected employees+ /b0 in the case of any other failure relating to employee representatives, by any of the employee representatives to whom the failure related+ /c0 in the case of failure relating to representatives of a trade union, by the trade union+ and /d0 in any other case, by any of his employees who are affected employees. /)0 If on a complaint under paragraph /%0 a question arises whether or not it was reasonably practicable for an employer to perform a particular duty or as to what steps he took towards performing it, it shall be for him to showC /a0 that there were special circumstances which rendered it not reasonably practicable for him to perform the duty+ and /b0 that he took all such steps towards its performance as were reasonably practicable in those circumstances. /=0 If on a complaint under paragraph /%0 a question arises as to whether or not an employee representative was an appropriate representative for the purposes of regulation %=, it shall be for the employer to show that the employee representative had the necessary authority to represent the affected employees. /70 ;n a complaint under paragraph /%0/a0 it shall be for the employer to show that the requirements in regulation %7 have been satisfied. /@0 ;n a complaint against a transferor that he had failed to perform the duty imposed upon him by virtue of regulation %=/)0/d0 or, so far as relating thereto, regulation %=/(0, he may not show that it was not reasonably practicable for him to perform the duty in question for the reason that the transferee had failed to give him the requisite information at the requisite time in accordance with regulation %=/70 unless he gives the transferee notice of his intention to show that fact+ and the giving of the notice shall make the transferee a party to the proceedings. /D0 In relation to any complaint under paragraph /%0, a failure on the part of a person controlling /directly or indirectly0 the employer to provide information to the employer shall not constitute special circumstances rendering it not reasonably practicable for the employer to comply with such a requirement. /A0 -here the tribunal finds a complaint against a transferee under paragraph /%0 well*founded it shall make a declaration to that effect and may order the transferee to pay appropriate compensation to such descriptions of affected employees as may be specified in the award. /&0 -here the tribunal finds a complaint against a transferor under paragraph /%0 well*founded it shall make a declaration to that effect and mayC /a0 order the transferor, sub2ect to paragraph /(0, to pay appropriate compensation to such descriptions of affected employees as may be specified in the award+ or /b0 if the complaint is that the transferor did not perform the duty mentioned in paragraph /@0 and the transferor /after giving due notice0 shows the facts so mentioned, order the transferee to pay appropriate compensation to such descriptions of affected employees as may be specified in the award. /&0 The transferee shall be 2ointly and severally liable with the transferor in respect of compensation payable under sub*paragraph /&0/a0 or paragraph /%%0.

2%

/%<0 'n employee may present a complaint to an employment tribunal on the ground that he is an employee of a description to which an order under paragraph /A0 or /&0 relates and thatC /a0 in respect of an order under paragraph /A0, the transferee has failed, wholly or in part, to pay him compensation in pursuance of the order+ /b0 in respect of an order under paragraph /&0, the transferor or transferee, as applicable, has failed, wholly or in part, to pay him compensation in pursuance of the order. /%%0 -here the tribunal finds a complaint under paragraph /%<0 well*founded it shall order the transferor or transferee as applicable to pay the complainant the amount of compensation which it finds is due to him. /%)0 'n employment tribunal shall not consider a complaint under paragraph /%0 or /%<0 unless it is presented to the tribunal before the end of the period of three months beginning withC /a0 in respect of a complaint under paragraph /%0, the date on which the relevant transfer is completed+ or /b0 in respect of a complaint under paragraph /%<0, the date of the tribunalEs order under paragraph /A0 or /&0, or within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of the period of three months. %D ?ailure to inform or consult8 supplemental /%0 ,ection )<@/%0 of the %((D 'ct /complaint to be sole remedy for breach of relevant rights0 and section %& of the %((D Tribunals 'ct /conciliation0 shall apply to the rights conferred by regulation %@ and to proceedings under this regulation as they apply to the rights conferred by those 'cts and the employment tribunal proceedings mentioned in those 'cts.

$()

'n appeal shall lie and shall lie only to the 6mployment 'ppeal Tribunal on a question of law arising from any decision of, or arising in any proceedings before, an employment tribunal under or by virtue of these "egulations+ and section %%/%0 of the Tribunals and Inquiries 'ct %(() /appeals from certain tribunals to the Figh !ourt0 shall not apply in relation to any such proceedings.

/=0 'ppropriate compensation in regulation %@ means such sum not e.ceeding thirteen weeksE pay for the employee in question as the tribunal considers 2ust and equitable having regard to the seriousness of the failure of the employer to comply with his duty. /70 ,ections ))< to ))& of the %((D 'ct shall apply for calculating the amount of a weekEs pay for any employee for the purposes of paragraph /=0 and, for the purposes of that calculation, the calculation date shall beC /a0 in the case of an employee who is dismissed by reason of redundancy /within the meaning of sections %=( and %@@ of the %((D 'ct0 the date which is the calculation date for the purposes of any entitlement of his to a redundancy payment /within the meaning of those sections0 or which would be that calculation date if he were so entitled+ /b0 in the case of an employee who is dismissed for any other reason, the effective date of termination /within the meaning of sections (@/%0 and /)0 and (A of the %((D 'ct0 of his contract of employment+ /c0 in any other case, the date of the relevant transfer.

2)