Limitations of duty to consult on business reasons for proposed redundancies

Consultant editor Darren Newman suggests that, although a recent ruling that employees should have been consulted over the closure of the colliery where they worked is important, it is no substitute for adequate implementation of the Information and Consultation Directive.

Ellington Colliery was the last deep coal mine in Northumberland when it closed in 2005 with the loss of more than 300 jobs. On XpertHR this week we report the EAT decision in UK Coal Mining Ltd v (1) National Union of Mineworkers (Northumberland Area) (2) The British Association of Colliery Management EAT/0397/06 & EAT/0414/07, which concerned the consultations that took place with the unions prior to the closure. The tribunal found that there had been a fundamental failure on the part of the employer to consult employee representatives in accordance with s.188 of the Trade Union and Labour Relations (Consolidation) Act 1992. Central to the tribunal decision was that catastrophic flooding of the pit meant that, as far as the employer was concerned, it was economically necessary to close it down - but that the employer maintained throughout that the pit was being closed for health and safety reasons.

In appealing against the tribunal finding, the employer relied on a well-established principle - that, in conducting consultations over collective redundancies, the employer is not obliged to consult over the decisions that have led to the redundancies being proposed. This reached its zenith in Securicor Omega Express Ltd v GMB [2004] IRLR 9 when the EAT held that an employer was not obliged to consult over its decision to close a number of branches - although there was an obligation to consult over the redundancies that resulted from that decision.

UK Coal Mining sought to argue that, because there was no obligation to consult over whether or not the pit should close, and merely an obligation to consult over the redundancies that resulted, it did not matter that the unions had been - as the tribunal found - misled as to the reason for the closure. I can't believe that counsel for the employer felt confident putting that argument to the EAT, and it is not surprising that it was rejected. What is noteworthy, however, is how far the EAT went in holding that the decision to close the pit, and not just the redundancies that followed, was covered by the obligation to consult in s.188.

In a deliberate departure from previous authority, Mr Justice Elias held that, where a closure makes redundancies inevitable, the duty to consult over the redundancies means that there is, in effect, a duty to consult over the decision that led to their being proposed. Here, this meant a duty to consult over whether or not the pit should be closed at all.

While this is an important decision, we should not get carried away. In this case, the EAT found that the decision to close the pit was inseparable from the decision to make the miners redundant. However, there is no suggestion that in every case of proposed redundancy the employer will have to enter into detailed consultations over the decisions that have led to that proposal.

For that level of consultation we should be able to look to the Information and Consultation of Employees Regulations 2004 (SI 2004/3426), which are intended to implement Directive 2002/14/EC. There is, however, a problem here. Under the Regulations, the duty to consult - including the duty to consult over strategic decisions that may affect employment - arises only if the employer has set up a formal consultation procedure. There is no automatic duty to do this; the employer can sit back and do nothing until employees organise a formal request. Even then, there is a lengthy negotiation procedure before any duty to consult kicks in.

I cannot see how anyone could think that the Regulations adequately implement the Directive. Although the Directive provides that "the practical arrangements for information and consultation" can be left to the member states (art. 2), this must be done in such a way as to "ensure their effectiveness". The UK's implementation of the Directive basically ensures that most employers need not worry about consulting employees on any sort of ongoing basis. How effective is that? Until somebody notices that the Regulations need reform, employees will have to rely on the EAT's wide interpretation of the duty to consult over prospective redundancies.

perspective@irsonline.co.uk