Under the Trade Union and Labour Relations (Consolidation) Act 1992 Employers are under a statutory duty to consult with the appropriate employee representatives concerning proposed redundancies if the intention is to dismiss at least 20 employees at one establishment within a 90-day period. If there is a recognised trade union, the consultation must be with trade union representatives. The length of the required consultation period depends on the number of redundancies proposed.
In the UK, the position had been that a dismissal by reason of redundancy occurred at the point when the employee ceased to work for the employer. Provided consultation was meaningful, notice of termination of employment could be given during the consultation period. However, a ruling by the European Court of Justice (when asked to clarify the EC Collective Redundancies Directive in Junk v Wolfgang Kühnel) rejected this interpretation of the law. The Court ruled that the event which constitutes redundancy is the declaration by the employer of the intention to terminate the contract of employment. It viewed the actual cessation of the employment relationship as merely an effect of the earlier decision.
As a result of the ECJ’s ruling, consultation of the required duration must take place before any employees are given redundancy notices. The Court was of the view that consultation could not be meaningful, with a view to reaching an agreement, if the decision to dismiss employees had already been taken, effectively compromising the consultation process.
The effect of this decision is that an employer contemplating making between 20 and 99 employees redundant from one establishment must begin the consultation process at least 30 days before any decision to terminate contracts of employment is made. This period rises to 90 days if 100 or more redundancies are proposed.
In light of the decision in Junk v Wolfgang Kühnel, the Trade Union and Labour Relations (Consolidation) Act 1992 has been amended to provide that an employer proposing collective redundancies must notify the Secretary of State of the proposed redundancies at least 30 days or 90 days before giving notice to terminate an employee’s contract.