Consultation stations

28 April, 2006
Employers are warned to make sure they stay within the law when consulting employees on redundancy, says Clive Day, a solicitor with Eversheds LLP
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Most employers are keenly aware of their obligations to consult with workforce representatives in the context of “mass” redundancies. In broad terms, these apply to the redundancies of 20 or more employees at one site within a period of 90 days. Employers will usually have in mind the statutory minimum periods for such consultation: 30 days where fewer than 100 employees are affected or 90 days otherwise.
However, reliance on the statutory minimum can act as a distraction, with employers falling disastrously short of what the law requires.Cranwick’s caseThe case of Cranwick Country Food is a case in point. The firm operated two sausage-making factories. However, from the middle of 2003, Cranwick’s chief executive wanted to create one new super-site, which would result in mass redundancies. By January 5, 2004, Cranwick’s bid for the new site had been accepted. Yet despite having reasonably firm proposals for the move, Cranwick decided to wait before beginning consultation with the workforce at one of the factories.On February 18, 2004 the company began consultation with employee representatives and unions about a reduction in the workforce. An employment tribunal found that this consultation exercise was “minimal”, although it satisfied the minimum consultation periods.The tribunal agreed with the GMB that Cranwick had failed in its statutory consultation duties and made an award against the company of 70 days’ pay per employee.Meaningful consultation Discussions with employee representatives over 30 or 90 days prior to dismissal is a minimum starting point, but may not be adequate.Consultation has to be meaningful. Serving notice of dismissal during the minimum consultation period, for example, makes such consultation meaningless. Most importantly, the obligation is to consult affected employees “in good time” from when the employer “proposes” to make the employees redundant. This rather vague definition sub-divides into three distinct duties to consult regarding (a) ways of avoiding, (b) ways of reducing and (c) ways of mitigating the consequences of the proposed dismissals. A failure to carry out any one of these three individual duties will constitute a breach of the statutory obligation to consult.Comparing these obligations to Cranwick’s approach, the tribunal found that the company had deliberately delayed consultation until the redundancies were a fait accompli.So how do employers identify the trigger point for collective consultation? Legally this is when they are “proposing to dismiss” the employees; “proposing” means more than “contemplating” collective redundancies and appears to lie at the point that detailed plans crystallise, but before they are irrevocable.



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