Collective redundancy
consultation - duty to consult over reason for
closure
In a significant decision
which will have practical implications for
collective redundancy consultation, the Employment
Appeal Tribunal (EAT) has confirmed that, where
there is a workplace closure, there is a duty on
employers to consult about the reason for the
closure. This decision overturns previous case
law, and turns on the changes made to the wording
of section 188 of the Trade Union and Labour
Relations (Consolidation) Act 1992
("TULRCA").
In UK Coal Mining Ltd
v National Union of Mineworkers, UK Coal
Mining Ltd (UK Coal) owned a colliery in
Northumberland. In January 2005, after water began
to enter the colliery, UK Coal decided to close it
on safety and economic grounds. This decision
resulted in a proposal to make 158 employees
redundant, which triggered the duty to consult
with the recognised trade unions about ways of
avoiding the dismissals, under section 188 of
TULRCA. Although UK Coal commenced consultation
with the relevant unions, it soon proceeded with
the first compulsory redundancies. The unions
brought a tribunal claim for failure to consult.
The tribunal found that there were deliberate and
serious breaches of the statutory requirement to
consult and awarded the maximum protective award.
This decision was appealed by the union and upheld
by the EAT.
However, the union
cross-appealed against the tribunal's finding that
UK Coal was not obliged to consult over the reason
for the closure of the colliery. The EAT accepted
the union's argument that, following amendments
made to TULRCA in 1995 which clarified that there
was an obligation to consult over the avoidance of
dismissals, this significantly widened the scope
of the consultation obligation. It noted that the
obligation to consult over avoiding the proposed
redundancies inevitably involves engaging with the
reasons for the dismissals, and that in turn
requires consultation over the reasons for the
closure. The previous authorities which held
that there was no need to consult over the reasons
for closure are therefore no longer good
law.
Any employers proposing
the closure of a workplace therefore need to
revisit their consultation process. Whilst the EAT
notes that most employers will already inform
union representatives why they are considering
closures and will respond to union observations,
employers now need to be aware that this is a
legal requirement if they are to satisfy their
statutory obligations and avoid protective awards.
The decision could, for example, affect how soon
consultation begins and require further
consideration as to the appropriate extent and
degree of consultation about the reasons for
closure. It remains to be seen whether this
decision will be appealed.
Constructive dismissal and
grievance procedures
The EAT has upheld a claim
of constructive dismissal, confirming that it was
a fundamental breach of contract to compel an
employee to follow a procedure which required her
to discuss her grievance with the very manager who
was central to her complaint. This was held to be
the case even though the procedure concerned had
been negotiated with the unions. The EAT's
decision emphasises the need for employers to
adopt a flexible approach where the rigid
application of a grievance procedure would lead to
hardship or potential
unfairness.
In this case, GMB
Trade Union v Brown, Ms Brown had a grievance
against her line manager, a regional secretary of
the GMB, relating to the scope of her duties and
the change in her role. Although various meetings
took place between Ms Brown and her line manager,
their positions became entrenched. This had an
adverse effect on Ms Brown's wellbeing and she
could no longer attend the office due to stress.
Ms Brown subsequently
launched a formal grievance. The GMB's new Dignity
at Work procedure had two stages. The first
required an employee to raise their complaint
formally with the senior manager concerned. If the
issue was not resolved at the first stage, the
employee could then ask for the grievance to be
heard by an independent panel chaired by an ACAS
appointed arbitrator.
Ms Brown wanted to skip
the first stage and have the matter heard by an
independent panel. However, the manager
repeatedly refused to depart from the specific
stages in the Dignity at Work procedure. Ms Brown
eventually resigned, claiming that her attempts to
pursue a grievance about the way she had been
treated had been frustrated.
Upholding the decision of
the Employment Tribunal, the EAT confirmed that
the GMB's refusal to depart from the rigid
procedure amounted to a breach of trust and
confidence and the claimant's constructive
dismissal claim succeeded. In the circumstances,
it was unreasonable for any reasonable employer to
insist upon full compliance with the procedure.
TUPE cannot create rights
which did not exist
pre-transfer
The
Court of Appeal has recently confirmed that the
Transfer of Undertakings (Protection of
Employment) Regulations 1981 (TUPE) do not give a
transferred employee access to employment benefits
other than those to which he or she was entitled
before the transfer took place.
In
Jackson v Computershare Investor Services
plc, Mrs Jackson was employed from 1999 until
June 2004, when she transferred from Ci (UK) Ltd
to CIS. CIS operated a dual system of redundancy
terms which provided more favourable severance
terms to those who joined before 2002. When Mrs
Jackson was made redundant in 2002, she argued
that TUPE operated so as to give her continuity of
employment with CIS from 1999, and she was
therefore entitled to the more generous severance
terms.
Upholding
the decision of the EAT, the Court of Appeal
confirmed that TUPE could not be relied upon to
give Mrs Jackson rights that she did not enjoy
prior to the transfer. This was an artificial use
of TUPE. The fact that she was treated for
statutory purposes as having continuity of
employment dating back to 1999 did not affect her
entitlement to a scheme that did not exist at her
former employer. Mrs Jackson had joined CIS at the
point of transfer in 2004 and therefore was not
entitled to the more favourable redundancy
terms.
Although
this case was decided under the old TUPE
Regulations, the principle will continue to apply
under the 2006 TUPE Regulations and will therefore
cover transfers which occur after 6 April
2006.
EHRC calls for
representative action
In
his first major speech since taking over as chair
of the new Equality and Human Rights Commission,
Trevor Phillips has called for the Government to
introduce the use of representative actions,
similar to a class action law suit. Representative
actions would allow the Commission to bring a
claim on behalf of a number of identified
individuals and could provide quick access to
justice, reducing the burden on the employment
tribunal.
Individual rights and
responsibilities of employees: a guide for
employers and employees
DBERR
has produced a guide for employers
and employees to reflect recent changes to
employment law. This guide outlines employees' and
workers' individual rights and responsibilities
and the corresponding obligations for employers.
Early advice averts
employment tribunals
Independent
research commissioned
by ACAS has shown that seeking their advice on
workplace problems has helped avert employment
tribunals, saving businesses millions of pounds.
Revealing that the helpline helped to avoid around
16,000 employment tribunals last year, saving £120
million, the research also shows that redundancy,
lay-offs and business transfers are the biggest
workplace worries.
The
survey was undertaken with employers, employees
and third parties who had used the ACAS national
helpline. Almost a quarter (23 per cent) of
employees had been considering making an
employment tribunal claim before calling, but of
this percentage, almost a third (30 per cent)
decided against pursuing a claim as a result of
the information provided. In addition,
almost half of the employers who responded said
that their call to the helpline had prompted them
to update or improve existing policies at their
workplace, and 45 per cent reported that their
call had motivated them to implement new policies.
9 in 10 office workers
stressed at work
According
to research from recruitment consultants Badenoch
& Clark, more than nine in ten (92 per cent)
of the UK's office-based workers are stressed. Of
that high percentage, almost a third (32 per cent)
are often stressed and nearly one in 10 (8 per
cent) are always stressed.
Interestingly,
the research indicates that HR managers are the
most stressed with two thirds (65 per cent) saying
that they were often or always stressed at work.
The main cause of stress is a heavy workload (52
per cent), followed by the inefficiency of others
(47 per cent) and demanding customers (36 per
cent).
The Psychology of Disputes
- The heart versus the head
Our
Commercial Litigation Group recently commissioned
research to analyse how companies can improve the
way parties involved with disputes handle the
process and, more specifically, the psychological
and emotional aspects of dispute resolution.
The
research focuses on the way emotion can be a
barrier to objectivity and speedier dispute
resolution, and the harm that the emotional impact
of a dispute. The report provides guidance on
deciding how to proceed with dispute resolution, a
description of the impact that disputes cause and
suggestions to minimise the disruption to your
organisation, should a dispute occur. Click
here to read more.