EU employment law imposes a duty on employers to consult employee representatives in some redundancy situations.
However, what triggers this duty has been unclear due to conflicting legal decisions; is it when 20 redundancies are proposed across the employer as a whole, or 20 in a part of the employer’s operations? Over decades, UK law has been interpreted as meaning the latter, but, out of the blue, in 2013 the Employment Appeal Tribunal decided it was the former, to comply with EU law, potentially driving up employer risk and costs overnight. The EU Court of Justice decides which approach is right when it hands down its decision later this week. Martin Warren, Head of Employment Law at Eversheds LLP, comments:
“Many employers find it incredible that this law has become the subject of such basic uncertainty, decades after it was implemented, particularly given the risk of financial penalties potentially running into hundreds of thousands of pounds if they get it wrong. Yet, it is symptomatic of a growing trend, even in lower courts and tribunals, to boldly rewrite long established UK law where it conflicts with EU law in order to achieve compliance. Recent court decisions have given judges the green light to take this approach, leaving those affected unable to plan for sudden and significant legal changes which, in effect, pull the rug from under their feet. Meanwhile, the role of Parliament is reduced to getting involved if a conflict between UK and EU law requires the resolution of a fundamental feature of the UK legislation.”
“On a practical level, the approach taken by the Employment Appeal Tribunal, if endorsed by the Court of Justice this Thursday, adds little value to many employees. All employers, big and small, are already expected to consult with individual employees in redundancy situations. Collective consultation with employee representatives, the subject of this case, is an additional duty, aimed at larger scale redundancies sharing common reasons. Extending this to include fragmented, unrelated and ad hoc redundancies has the potential to duplicate existing individual consultation – which is of little assistance to the employees concerned. However, it does impact large scale redundancy projects impacting employees at multi-site operations which, previously, might not have triggered the EU duty to consult representatives.”