The Collective Redundancies Directive (98/59/EC) (the Directive) sets out consultation requirements for employers where a set number of redundancies are contemplated within a specified time frame, being either 30 or 90 days depending on the member state concerned.
In the UK, the Directive is implemented through the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA). Under section 188, TULRCA requires employers to consult on its redundancy proposal with those affected, where it proposes to dismiss 20 or more employees at one establishment within a reference period of 90 days or less. The required consultation period is either 30 (20-99 redundancies) or 45 days (100+ redundancies). TULRCA also requires employers to notify the Secretary of State of the proposal, via form HR1.
In UQ v Marclean Technologies SLU (C 300/19) which originated in Spain, the European Court of Justice (ECJ) assessed how the reference period of 30 or 90 days should be interpreted (i.e. how dismissals should be counted for the purposes of collective consultation requirements pursuant to the Directive).
UQ was dismissed by Marclean Technologies on 31 May 2018. Between 31 May 2018 and 14 August 2018, a further 36 employees ceased to be employed by Marclean. UQ sought to argue that there had been a collective dismissal and so her dismissal was therefore void. The Spanish Labour Court found that these dismissals could qualify as a collective redundancy. However, it referred questions to the ECJ to ascertain whether the calculation of the 90 day period should be exclusively before, or after, the dismissal in question; or any consecutive 90 day period during which the dismissal took effect.
The ECJ confirmed that the Directive must be taken to mean that, when counting dismissals for collective redundancy, the correct reference period to be used is in fact any 30 or 90 consecutive day period, during which time (1) the dismissal took place and (2) the greatest number of dismissals made by the employer took place ‘for one or more reasons not related to the individual workers concerned’. The court emphasised that the Directive aims to protect workers, and a reference period which is exclusive to before or after the dismissal only, would undermine this objective.
In practice, this means employers need to look both backwards and forwards at the timeline from each dismissal in order to assess whether that 90 day reference period includes 20 or more dismissals at any point during the period, thereby triggering collective consultation for all redundancies during that time.
This may have the resulting impact of imposing requirements on a dismissal which has already taken place, should an individual dismissal followed by subsequent dismissals trigger the threshold count. For example, there are no collective requirements for a redundancy proposal of five individuals. However, should an employer subsequently effect a second proposal for 15 employees within the same 90 day period as the first five, collective consultation obligations would be triggered in respect of all redundancies during this period, although the first five may have already taken place.
The ECJ decision could be particularly problematic for many employers who decide to make staggered or phased redundancies, which during the current climate of the pandemic and business uncertainty, would not be uncommon. Therefore, employers must ensure that each individual dismissal is carefully considered against a ‘rolling’ 90 day timeline in order to determine their obligations in connection with any redundancy proposal and minimise the risk of employment tribunal claims due to non-compliance with collective consultation obligations.
The ECJ decision was delivered prior to the end of the transition period (the judgement has only just been published in English) and therefore is “retained” EU law after 1 January 2021. In the UK the Court of Appeal and the Supreme Court may depart from the decisions of the ECJ where it is “right to do so”.