In the recent case of UQ v Marclean Technologies S.L.U., the European Court of Justice ("ECJ") considered the reference period that should be used to determine whether the threshold has been reached to trigger the obligations for collective consultation under the EU Collective Redundancies Directive (the "Directive"), which is implemented in the UK under the Trade Union and Labour Relations (Consolidation) Act 1992 ("TULRCA").
Under the Directive, employers are under an obligation to consult collectively when a certain number of redundancies occur within a period of either 30 or 90 days, depending on the member state. In the UK, under TULRCA, the obligation is triggered when 20 or more redundancies are proposed within a 90 day period. In Marclean, the Spanish courts asked the ECJ how the reference period is calculated - e.g. is it the period immediately prior to the dismissal in question, or the period following it? The ECJ held that it is neither – the reference period is the 90 days in which the relevant individual was dismissed and which contains the greatest number of dismissals. So, in the UK, employers must look both backwards and forwards from the date of an individual's dismissal to determine whether there are 20 or more dismissals falling within a 90 day period.
There are obvious practical difficulties arising from this, which the ECJ did not address. Consider two batches of ten dismissals, made a month apart but whose exit dates all fall in the same 90 day window. It seems, under Marclean, that the later batch will trigger the duty to consult collectively. But does it require consultation with both batches? What if the people in batch one have already received notice of dismissal, or even left the company, before the proposal for batch two is made? It seems unlikely that an employer could be found at fault in relation to batch one in this last example as the decision to dismiss has been made, rendering collective consultation pointless. If nothing else, the 'special circumstances' defence would surely apply in respect of batch one.
Given the sanction for breach of the TULRCA duty is not just a financial one (a penalty of 90 days' pay per employee), but a criminal one, if the required HR1 form is not filed with the Secretary of State, employers are likely to take a cautious line. Certainly, redundancy 'trackers' are recommended, and many HR departments operate these already, so that employers can monitor continuously the number of exits due to fall within a 90 day rolling window (looking backwards and forwards) and then, as soon as the trigger appears likely to be met, a decision can be taken on the appropriate course of action.
Originally published 9 December, 2020
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