In July 2013 the Employment Appeal Tribunal (the "EAT") held that when deciding if 20 or more redundancies were being made, thereby triggering the collective consultation obligations under the Trade Union and Labour Relations (Consolidation) Act 1992 ("TURLCA"), the words at "one establishment" in TURLCA should be ignored to ensure the proper implementation of the European Collective Redundancies Directive (the "Directive").
Previously it had been thought that if a company operated out of several locations, the obligation to consult collectively only arose where 20 or more redundancies were being made at one of these locations. The EAT's judgement meant that the number of redundancies across all of the locations had to be looked at in order to determine if the collective consultation obligations applied. This therefore meant that even where less than 20 redundancies were being made at each location, if across all of the locations, 20 or more were being made, an employer had to engage in the collective redundancy process. Clearly this decision had the potential to increase the situations in which an employer would be required to collectively consult.
The EAT's decision was appealed to the Court of Appeal who in turn referred the issue to the European Court of Justice. This case was conjoined with two other cases. The Advocate General has now issued his opinion in these conjoined cases and has expressed his view that the words "at one establishment" in TURLCA are not at odds with the Directive. He has stated that in determining the number of redundancies which are being made for the purposes of the Directive, the particular employment unit to which the employees are assigned to work should be looked at; and it is not necessary to take account of the number of redundancies being made across all of the employer's employment units. The Advocate General said it is for national courts to define what amounts to a single employment unit.
The Advocate General also expressed his opinion that the non-renewal of fixed term contracts when they come to their natural expiry date, are not to be taken into account when determining the number of people being made redundant. However, if the fixed term contract is brought to an end early, it may constitute a redundancy situation and therefore should be counted when determining if 20 or more redundancies have been made. This accords with recent changes made to TURLCA by the UK Government.
It should be noted that this is only the Advocate General's opinion and it is open to the ECJ to come to a different conclusion. As such, employers should for the time being continue to follow a cautious approach and look at the number of redundancies across their whole business for the purpose of deciding if a collective redundancy situation exists.