It is hard to avoid the media furore following the events at P&O Ferries last week, where approximately 800 staff were reportedly dismissed for redundancy, without notice and without prior consultation, before being replaced with cheaper staff. Leaving aside the specifics and merits of P&O’s actions (which are complicated by international and seafaring considerations), the
Employers are required to collectively consult when proposing to dismiss 20 or more employees at one establishment as redundant within a period of 90 days or less (section 188 Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”).Defining what is meant by “at one establishment” for this purpose has always been tricky, and has led to significant debate. The issue is of particular importance to employers with multiple sites, such as retailers.
But now it seems that such debate has been rendered obsolete, with the Employment Appeal Tribunal (the “EAT”) holding that the words “at one establishment” should be deleted from section 188. Although this makes the law easier to apply, employers should be aware that the price of such clarity is that they are now more likely to be subject to collective consultation obligations when making widespread redundancies.Continue Reading Rewriting the law – UK collective redundancy consultation obligations change dramatically
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.
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 Plans for new ‘owner-employee’ employment contracts announced
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.Continue Reading ‘Costs plus’ approach to justifying discrimination in the UK endorsed by the Court of Appeal
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 Expiry of fixed term contracts and UK collective redundancy consultation
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…
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.Continue Reading Length of service criteria in redundancy selection can be lawful