Redundancy series: Numbers at risk

As you will likely know, when you propose to dismiss 20 or more employees at one establishment within a 90-day period the collective obligations in section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) are triggered. Knowing when you’ve hit 20 is therefore the key.

How do we calculate the number at risk of redundancy?

It may seem obvious, but it is worth checking which entity (if there are several) employs each person at risk. It may be that there are fewer than 20 employed by each company, in which case section 188 doesn’t apply.

If there are more than 20 employed, the next thing to do is check which establishment each person is employed in. This is a more straightforward answer following the Woolworths case. It could be that you have several stores, offices or regions and depending on how each are operated and how they function each could be a separate establishment.

The next issue to determine is how many other redundancies in that establishment have been made in the past. TULRCA states (section 188(3)) that you ignore any employees in respect of whose proposed dismissal consultation has already begun. However, the European Court of Justice (ECJ) case of UQ v Marclean Technologies SLU states that the period is a rolling 90-day period so you would have to look back and then calculate how many redundancies are being proposed within 90 days to work out if you need to collectively consult (and more worryingly, whether you should have collectively consulted with the first batch).

The ECJ decision is very difficult to work through in practice, as you may not have had your crystal ball out when embarking on the first tranche of fewer than 20 redundancies.

While the courts in England and Wales are unlikely to be able to apply the ECJ decision because of section 188(3) overriding it, more cautious employers may wish to review redundancies taking effect over the rolling 90 days and consult accordingly, even restarting consultations with the first group, on a collective basis this time. Although some may see this as overkill and unworkable, employers should note that failing to inform the Government via the submission of Form HR1 is a criminal offence and failing to consult could also trigger awards of 90 days’ gross pay per affected employee.

And don’t forget to count volunteers for redundancy – they still count for the purposes of section 188.

What if we need to propose more redundancies after announcing the first ones?

As mentioned above, section 188(3) states that you ignore any redundancies over which you are already in consultation (note however the above). Having said that, this won’t apply where an employer has purposefully delayed starting another round or has split the process into two or more proposals. Paper trails will be key to establishing what the employer knew or planned at each stage.

If a genuine need to propose further redundancies arises, the numbers should be calculated based on those concerned and not taking into account earlier consultations (unless you wish to follow Marclean).