UK: European Court of Justice ruling on collective redundancies threshold raises doubts over UK approach

The European Court of Justice has ruled that employers have to look both backwards and forwards from an individual dismissal to determine whether the threshold number of 20 redundancies to trigger information and consultation obligations is met over a 90 day period.  The ruling conflicts with the UK forward–looking approach which focuses on the employer's proposed dates and dismissals.  Employers planning successive small batches of redundancies who wish to avoid the risk of claims will need to take particular care to ensure they do not inadvertently cross the threshold number over a rolling 90 day period.

Under the Trade Union and Labour Relations (Consolidation) Act 1992 ('TULRCA') which implements the EU Collective Redundancies Directive, the duty to inform and consult is triggered when an employer proposes 20 or more dismissals in total within a 90 day period. This could occur where the employer proposes 10 dismissals and then, before it has implemented those, formulates a second proposal to implement a further 10 within 90 days.  However, TULRCA expressly provides that if consultation has already started for the first batch, they are not taken into account in applying the threshold to a subsequent batch within the 90 days.  Case law suggests the same applies if notices of termination have already been given prior to the employer formulating its proposal for the second batch.

In UQ v Marclean Technologies C-300-19, the European Court held that, in interpreting the definition of 'collective redundancies' in Article 1 of the Directive, employers have to look both backwards and forwards from an individual dismissal to determine whether the threshold number of redundancies is met over the 90 day period.  The focus is on the actual dates of dismissal and not on whether, at any particular point in time, the employer had a proposal (which it hadn't yet implemented or consulted on) for the threshold number of redundancies planned to take place within a 90 day future period.

Unfortunately the Court did not consider the substantive obligations to inform and consult in Article 2 of the Directive, which arise when an employer 'contemplates' collective redundancies, or to notify relevant authorities in Articles 3 and 4, which apply to 'projected' or 'planned' redundancies - both of these are clearly forward-looking.  Instead, the judgment appears to be saying that, if the individual dismissal plus later dismissals would reach the threshold number, the employer would inadvertently be in breach of the obligation to consult over the first dismissal even though it only formed its plan to make further redundancies after the first dismissal had taken effect.  Having started consultation for a first batch of redundancies would also not prevent them from being counted towards the threshold for later redundancies within 90 days.

As the judgment was published before the end of the Brexit transition period, it will remain binding on English tribunals after 31 December 2020 and they will be obliged to attempt to construe TULRCA consistently with the judgment, to the extent possible.  Only the Supreme Court and the Court of Appeal will be able to depart from the judgment where they consider it right to do so. Ultimately (and subject to the terms of any deal agreed with the EU), the UK Government could also amend TULRCA to make the position clearer.  In the meantime, however, employers will need to plan carefully and ensure they are aware of all past and anticipated redundancies if they are to avoid the risk of claims due to inadvertently crossing the threshold over the rolling 90 day period.