When are proposed dismissals for reasons not related to the individuals concerned? This is the question that employers, trade unions and Employment Tribunals must address when considering whether an employer is obliged to consult about collective redundancies, because it is only when a dismissal is for reasons unrelated to the individual concerned that the duty to consult arises.
The Supreme Court endorsed the ‘admirable test’ stated by the Employment Appeal Tribunal in University and College Union v University of Stirling:
‘A reason relates to the individual if it is something to do with him such as something he is or something he has done. It is to be distinguished from a reason relating to the employer, such as his (or in the case of insolvency, his creditors’) need to effect business change in some respect.’
But the Supreme Court has unanimously held that the Employment Appeal Tribunal and the Inner House of the Court of Session were wrong to place the consideration that employees had been employed on limited-term contracts into the individual, rather than the non-individual, category, because if that was a reason related to the individual, any consideration about terms and conditions would be and the purpose of the legislation would be undermined.
The gold-plating of the EU law duty to consult, in relation to limited-term employees, has been removed: since 6 April 2013, domestic law goes no further than Council Directive 98/59/EC requires.
But the Supreme Court’s decision will nonetheless have huge benefits for the thousands of trade union members who stand directly to benefit from it; the position that unions such as UCU took in respect of their many members on fixed-term employees has now been vindicated after a 5-year legal battle.
And, more generally, the Supreme Court’s decision is an important addition to the law on collective consultation for two reasons:
- Firstly, it gives great weight to the purposes of the collective consultation obligation as the context for interpretation of its statutory provisions: it is a call for purposive construction so as to promote and secure the aims of collective consultation.
- Secondly, the avenue opened by the decisions of the EAT and Inner House of the Court of Session, for arguing that considerations of employees’ terms and conditions related to those employees as individuals has been definitively rejected as heretical.
The decision also gives rise to other interesting issues that will now need to be considered and determined:
- when, in the case of limited term employees, who are dismissed (or whose dismissals are proposed) when their limited-term contracts are not renewed, does the employer ‘propose to dismiss’?
- how are the numbers of employees whom the employer proposes to dismiss as redundant to be established where limited-term contracts are due to expire from time to time?
- in relation to limited-term employees, what should the scope of the collective consultation obligation be?
It is too early to say whether these issues will be resolved in a way which impacts on the wider law of collective consultation.
Cloisters’ barristers Caspar Glyn QC and Tom Brown appeared for the successful appellant. Caspar, who led Tom, in the case said “UCU has fulfilled its three primary aims. Firstly it has won compensation for hundreds of its members and for those more widely in the Trades Union movement who will benefit from the stayed and sisted cases. Secondly its view of the purposive nature of consultation was endorsed and finally it has ensured that there can be no whittling away of future protection of rights by preserving the wider view of redundancy. “
For the Supreme Court press summary click here