On 6 April 2013, new consultation periods came into force for collective redundancies.
As before, the law does not specify a minimum period of collective consultation. Collective consultation must however be ‘meaningful’ and, importantly, must start at least a specified number of days before the redundancy dismissals take effect.
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The Chancellor of the Exchequer, George Osborne, has announced plans to introduce a new type of employment contract – an 'owner-employee' employment contract. ‘Owner-employees’ will receive between £2,000 and £50,000 worth of shares (which will be exempt from capital gains tax) in exchange for giving up certain rights, including redundancy rights, the right to claim unfair dismissal and the right to request flexible working or time off for training. Owner-employees will also be required to give 16 weeks’ notice of their return from maternity leave, rather than the current 8 weeks.
Continue Reading...The Court of Appeal in Woodcock v North Cumbria Primary Care Trust has ruled that the savings of costs alone will not, without more, amount to a legitimate aim so as to justify discrimination. In this case, Mr Woodcock was dismissed by reason of redundancy just before his 50th birthday in order to avoid his qualifying for significant enhanced early retirement terms. The Court of Appeal (CA) held that this treatment amounted to discrimination by reason of age but was justified since the legitimate aim of dismissing him was to give effect to his redundancy and to save costs. The aim of the dismissal at that particular age was not purely to save costs and so was justifiable.
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The Employment Appeal Tribunal (EAT) has provided guidance on when the expiry of a fixed term contract will count toward the number of dismissals proposed by an employer that triggers collective redundancy consultation obligations.
The EAT held that employees who were dismissed by virtue of the expiry of their fixed term contracts were not dismissed for “redundancy” under the wider definition of that concept contained in s.195 Trade Union and Labour Relations (Consolidation) Act 1992 (TULCRA) and therefore their dismissals did not count toward the number of dismissals required to trigger collective redundancy consultation obligations under s.188 TULCRA minimum 20 employee threshold. (University of Stirling v University and College Union). This decision should be treated with caution since not all dismissals on expiry of fixed term contracts will fall outside s.188 obligations. Such dismissals may ‘count’ when the dismissals are part of a wider exercise involving job losses and in other circumstances where the dismissal does not relate to the employee’s performance or conduct.
Continue Reading...Employers could face significant unanticipated penalties under TUPE and collective redundancy legislation as a result of the Agency Workers Regulations 2010 (AWR) which came into force on 1 October 2011.
The AWR adds to the list of mandatory information to be provided to employee representatives under TUPE (the Transfer of Undertakings (Protection of Employment) Regulations 2006) and collective redundancy legislation (s.188 of TULR(C)A 1992). From 1 October 2011, the AWR requires that employee representatives also be given information about the use of agency workers by the transferor including:
The requirement is extensive since information is required in respect of all agency workers working "temporarily for and under the supervision and direction" of the employer. Under TUPE, the employer is the employer of any affected employees which is widely defined to include not just transferring employees but also those affected by the transfer, or those who may be affected by measures taken in connection with it. Hence, if only part of a business is transferred, it is not only necessary to provide information about agency workers working in the relevant part but also those working in all other parts of the employer’s business, provided they are under the supervision of the transferor. Agency workers working temporarily in the business or part that is transferred will not, however, transfer along with the employees of the transferor who are wholly or mainly assigned to the business. Nor does TUPE give them the right to participate in the election of the employee representatives.
However, a failure to comply with this new requirement could result in the employer receiving a punitive award of compensation of up to 13 weeks' actual pay per affected employee under TUPE and 90 days' actual pay per affected employee under the collective redundancy legislation.
The AWR makes no allowance for employers who had already complied with their TUPE/S.188 obligations prior to the additional requirements of the AWR coming into force on 1 October 2011. It follows that an employer risks incurring such penalties unless they comply with these extended requirements to provide information prior to the TUPE transfer or the collective redundancies taking effect. Further, to comply with the AWR it would be prudent for an employer to update the information provided to employee representatives if the number of agency workers fluctuates prior to the transfer date (in the case of TUPE transfers), or the date the redundancy dismissal take effect (for collective redundancy dismissals).
For further information, contact Ruth Bonino or any member of the Reed Smith employment team with whom you normally deal.
In Rolls Royce Plc v Unite the Union, the Court of Appeal has ruled that using length of service as a criterion in a redundancy selection policy can be lawful in some circumstances. Although the use of length of service amounts to indirect age discrimination, it can be objectively justified where it pursues the legitimate aim of maintaining a stable workforce during a redundancy exercise and rewarding loyalty, and is a proportionate means of achieving that aim. In this case, the means of achieving that legitimate aim were proportionate because the criterion was one of many criteria used in the selection process and the means used were consistent with principles of fairness.
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