UK Coal Mining Ltd v NUM (Northumberland Area) & another EAT/0397/06 & EAT/0141/07

redundancy | union consultation | reason for redundancies

The Employment Appeal Tribunal (EAT) has held that an employer was obliged to consult with appropriate representatives about the reasons for the closure of the workplace, which was the reason for the redundancies.

UK Coal Mining Ltd decided to close Ellington Colliery following flooding in January 2005. The DTI was notified on 21 January that the employer was due to announce the closure. On 27 January the union asked the employer to comply with its 90-day consultation obligation but was told the employer would proceed. A written notification gave the reason for the proposed redundancies as safety issues resulting from the flooding. More than 100 employees were made redundant on 26 February 2005.

The unions sought protective awards against the employer for failing to comply with its obligations under the Trade Union and Labour Relations (Consolidation) Act 1992, section 188. Under section 188 an employer is obliged to consult appropriate representatives of affected employees where it is 'proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less'. Where the employer is proposing to dismiss 100 or more employees the consultation must begin at least 90 days before the first dismissal takes effect.

The employment tribunal found that the employer had failed to comply with its requirement to consult and awarded maximum compensation of 90 days' pay under the protective award. The tribunal found that the employer had decided to close the colliery for economic reasons and not safety factors as notified to the unions. The employer appealed, arguing that the tribunal had made errors of law that impacted on the amount of the protective award. The two unions cross-appealed the tribunal's finding that there was no obligation to consult the unions about the reason for the closure.

The EAT dismissed the employer's appeal. There was no evidence that the reason for the dismissals was safety concerns. The real reasons were economic. The employer had failed to consult in accordance with the requirements. The EAT agreed with the unions that the tribunal had been right to take into account the employer's deception when making the protective awards. In Susie Radin Ltd v GMB and others [2004] IRLR 400 CA the Court of Appeal had made clear that the protective award should be based on the employer's default and not on the need to compensate the employees.

With regard to the unions' cross appeal, the EAT agreed that the tribunal had been wrong to find that the employer was not obliged to consult about the reasons for the proposed dismissals. The tribunal's decision had been based on the High Court's judgment in R v British Coal Corporation and Secretary of State for Trade and Industry ex parte Vardy and others [1993] IRLR 104 HC that section 188 did not require consultation about the reason for the redundancies. At that time section 188 required consultation 'about the dismissals'. Since then the legislation had been amended to give effect to Article 2 of Directive 75/129/EC (since replaced by Council Directive 98/59/EC). Now employers are required to consult about, amongst other things, ways of 'avoiding the dismissals'. The EAT agreed with the unions that if there was no obligation to discuss the decision to close the workplace then this made a mockery of the obligation to consult about ways of avoiding dismissals. Further, given the broad requirement under the Information and Consultation of Employees Regulations 2004 to consult over economic decisions and the employer's economic situation, it would be strange if this obligation to consult applied up to the point of redundancies being proposed but then ceased as the 1992 Act took effect, just as the issue became more crucial for the employees. The obligation to consult about avoiding redundancies involved engaging with the reasons for the dismissals and, therefore, the reasons for the closure.

Go to XpertHR case law stop press.