Facts
The Respondent is a large international IT company. The Claimant was employed by the Respondent from 1 December 2015 until 29 July 2022, running “Business Intelligence and Reporting” within the sales division. The Claimant brought claims for unfair dismissal and for the protective award under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”). Implementing the EU Collective Redundancies Directive (No 98/59) (“the Directive”), TULRCA requires employers to consult appropriate representatives when “proposing” to dismiss 20 or more employees as redundant within 90 days.
Employment tribunal
The employment tribunal held that the Respondent was in breach of the duty under section 188 of TULRCA to consult appropriate representatives when “proposing” to dismiss 20 or more employees as redundant within 90 days. Following the decision of the Court of Justice in UQ v Marclean Technologies the tribunal directed itself that an employer who proposed fewer than the threshold number of dismissals within 90 days was subject to the obligation to consult if it subsequently proposed additional dismissals within a period of 90 days (so making the total employees to be dismissed 20 or more).
Further, the tribunal held that the Respondent operated as the “de facto” employer of the employees whom it proposed to dismiss as redundant for the purpose of the duty in section 188, even though the employees were employed by a number of discrete legal entities,and made a protective award of 90 days’ pay.
The tribunal also held that the Respondent had unfairly dismissed the Claimant because it did not apply its mind to the appropriate “pool” for selection of those to be made redundant and it was outside the range of reasonable responses not to place one other employee in the pool and it had not adequately consulted with the Claimant about his redundancy. The Respondent appealed.
Employment appeal tribunal (“EAT”)
Allowing the Respondent’s appeal on points 1) and 2) below.
1) The tribunal erred in its interpretation of Marclean. Properly analysed, Marclean concerned the definition of “collective redundancies” in Article 1 of the Directive, not whether an employer was “contemplating” dismissals under Article 2. Therefore, it did not affect the proper interpretation of the “proposing” in section 188 of TULRCA, the domestic concept corresponding to “contemplating” in the Directive. In any event, it was not possible to interpret “proposing” in section 188 TULRCA as the tribunal did in reliance on its reading of Marclean.
The EAT was clear that the focus in this case was on what the employer was “proposing” for the future. The tribunal cannot simply deduce the answer to that statutory question from the total number of employees dismissed, or proposed to be dismissed, within any period of 90 days by looking backwards and forwards. In applying section 188 a tribunal should focus on the statutory question of whether an employer was “proposing” to dismiss the relevant numbers at the material time. The tribunal should not have been distracted by concepts from Marclean directed to answering a different question.
2) The duty under section 188 arises when an employer proposes to dismiss 20 or more employees, meaning individuals who have a contract of employment with the employer. Within a corporate group, the Directive also places the obligation to consult on the relevant company with the status of employer. The tribunal therefore erred in concluding that the thresholds in section 188 were met because the Respondent acted as the “de facto” employer for all UK staff, despite evidence indicating that some of those individuals were or may have been employed by separate legal entities.
3) The tribunal did not err in other respects. Section 188 of TULRCA does not require a single proposal originating from one department; the tribunal correctly addressed the protective award; it was entitled to find that the Respondent acted unreasonably for the purpose of section 98(4) of the Employment Rights Act 1996 by failing to include another employee in the redundancy selection pool; and it provided sufficient reasons for finding that consultation with the Claimant was inadequate.
Comment
Employers will undoubtedly welcome this first appellate decision on the correct interpretation of Marclean. The EAT has clarified that Marclean was not concerned with “proposing” redundancies under section 188 of TULCRA. Centred on the employer’s plans at the relevant time, the question as to whether the duty has arisen under section 188 is inherently a forward-looking assessment. The core principle is that the duty turns on future proposals, not backward calculation of dismissals. As the EAT held it cannot simply be inferred from the fact that 20 or more dismissals occur within any 90 day period that the employer was, at some point, “proposing” all of those dismissals. For instance, a second round of redundancies might be proposed more than two months after the first, arising from circumstances that were entirely unforeseeable when the initial tranche was proposed.
The EAT was keen to highlight that tribunals should be astute to see through artificial divisions of dismissals into batches, deliberate delaying or staggering of dismissals to take advantage of section 188. Tribunals have the tools to protect claimants in these circumstances by legitimately inferring that an employer was at some stage “proposing” sufficient collective dismissals to trigger the duties from the fact of their subsequent occurrence.
