Collective redundancy consultations – backward and forward30 November 2020

Where an employer proposes large scale redundancies of 20 or more employees within a period of 90 days or less (the reference period), it must consult on its proposal with representatives of the affected employees and notify the Department for Business, Energy and Industrial Strategy. The duty to collectively consult is triggered even if the intention to declare redundancies is provisional and the exact roles at risk have not been identified. Failure to collectively consult could render any subsequent dismissals unfair and/or result in protective awards of compensation of up to 90 days gross pay being made in favour of each of the affected employees – potentially a significant amount. These provisions are derived from the European Commission and incorporated into English law.

The reference period has been taken to mean a period of 90 consecutive days which contains the greatest number of redundancy dismissals proposed by the employer. The employer must therefore project forward and if it is apparent that the proposed redundancies might claim 20 or more employees over any 90-day period then the collective consultation obligations are triggered.

A recent recommendation by the Advocate General of the European Court of Justice (ECJ) on a Spanish case (UQ v Marclean Technologies) could complicate how this 90-day reference period is calculated.

In this case the employee brought a claim for unfair dismissal, arguing that her dismissal was part of a “covert” collective redundancy scheme. She claimed that between 31 May and 14 August 2018, seven people had ceased working for Marclean, in addition to a further 29 people on 15 August 2018. The Spanish court was unsure whether dismissals taking place after the employee’s dismissal should be considered to determine whether collective redundancies had taken place.

The Advocate General recommended that the 90-day period is a “rolling period”. The consequence is that employers are required to look both backwards and forwards over 90 days to determine whether the threshold number of redundancies is met over that period. If the employee was dismissed within a consecutive 90-day period, calculated backwards or forwards, and the total number of redundancies within that period reaches the required threshold of 20 or more, the obligation to consult collectively will have been triggered.