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:
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.