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EAT hold expiry of a fixed term contract is not redundancy for the purposes of collective consultation

17 February 2012 #Employment

When an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days, the employer must consult all appropriate representatives of the employees who may be dismissed.

If it is proposed that:  

  • between 20 and 99 employees are to be made redundant, consultation is for at least 30 days before the first dismissal; or 
  • 100 or more employees may be dismissed, consultation is for a minimum of 90 days before the first dismissal.

This is in addition to the employer’s duty to consult employees individually.

Failure by the employer to comply with its collective consultation can lead to a protective award being made by an employment tribunal ordering the employer to pay affected employees gross pay for the "protected period".

For the purpose of providing information and consultation, redundancy means ‘dismissal for a reason not related to the individual concerned or for a number of reasons all of which are not so related’. This definition is wider than that relating to individual redundancy.

In this case, the University of Stirling employed a number of employees on fixed-term contracts, all of which had expired. The University and College trade union claimed that employees were dismissed as redundant within the definition contained in section 195 of TULRCA and that the University had failed to comply with its collective consultation obligations. They brought a test case on this basis on behalf of four of the employees.

The Employment Appeal Tribunal held that the "related to the individual" means that it has "something to do with him such as something he is, or something he has done". It can be distinguished from a reason relating to the employer, such as the need to change its business.  The Claimant’s were dismissed because they had agreed that their employment was for a fixed period and was, therefore, a reason relating to the individual and so no collective consultation was required.

However, if the reason for the non-renewal of the fixed-term contracts was due to a business decision by the employer which might cause significant job losses, for example, but does not involve any focus on the individual employee, then collective consultation would be required.

Employers should therefore consider carefully the reasons for the expiry of a fixed term contract to weigh up whether, if 20 or more contracts are ending within 90 days, collective consultation is required.

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.
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