Last week, the Employment Appeal Tribunal (EAT) delivered a landmark decision that could have a major impact on employers in redundancy situations.
It is well established law that before making anyone redundant, there is a requirement to consult with those employees affected by the redundancy and there are minimum consultation periods, of:
- 90 days where 100 or more employees are affected at one establishment within 90 days;
- 30 days where 20 or more employees are affected at one establishment within 90 days;
The case of UK Coal Mining Ltd v NUM concerned the closure (in 2005) of the Ellington Colliery in Northumberland and the consequent loss of 330 jobs. The EAT held that there is a duty on employers to consult not just on the redundancies but also over the reason for making the redundancies in the first place. Previously, the closure of an entire plant/site was a business decision over which employer’s legally did not have to consult with the workforce. In otherwords, employers could decide unilaterally that a factory or office was uneconomic and subsequently dismiss the entire workforce on grounds of redundancy.
However, in light of this decision there will have to be a period of consultation before any decision is taken to close a place of business. Employers will be forced to enter into detailed talks with employee or trade union (where applicable) representatives to justify the business rationale for closing sites.
This decision has brought Britain closer to continental Europe’s more employee-friendly regulations. Hard to believe, but the European view is that Britain’s Employment Law position in this area is not pro-employee enough!!
It is understood that UK Coal Mining Ltd are considering an Appeal.