EMCC European Monitoring Centre on Change

United Kingdom: Staff information and consultation on restructuring plans

United Kingdom
Phase: Anticipation
Type:
Staff information and consultation on restructuring plans
Last modified: 10 June, 2019
Native name:

Trade Union and Labour Relations (Consolidation) Act 1992; Information and Consultation of Employees Regulations 2004; Transfer of Undertakings (Protection of Employment) Regulations 2006; Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014; Transnational Information and Consultation of Employees Regulations 1999; Transnational Information and Consultation of Employees (Amendment) Regulations 2010

English name:

Trade Union and Labour Relations (Consolidation) Act 1992; Information and Consultation of Employees Regulations 2004; Transfer of Undertakings (Protection of Employment) Regulations 2006; Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014; Transnational Information and Consultation of Employees Regulations 1999; Transnational Information and Consultation of Employees (Amendment) Regulations 2010

Article

Part IV (Trade Union and Labour Relations (Consolidation) Act 1992); Part IV (Information and Consultation of Employees Regulation 2004); Regulation 13 (Transfer of Undertakings (Protection of Employment) Regulations 2006); Whole law (Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014); Whole law (Transnational Information and Consultation of Employees Regulations 1999); Whole Law (Transnational Information and Consultation of Employees Regulations 2010)

Description

Requirements depend largely on the size of the firm and on whether an information and consultation agreement exists.

The Information and Consultation of Employees Regulations (2004) require employers with 50 or more employees to consult on probable developments in employment and work organisation. Employees can request for an information and consultation agreement to be negotiated with their employer, which obliges employers to provide information on probable developments in employment and work organisation. However, the extent of this duty depends on the content of the information and consultation agreement itself.

Employers are obliged to consult with existing staff representatives if arrangements exist, such as works councils or recognised trade union representatives. In line with the regulations for redundancy, the regulations require only that employers listen to the views of the employee representatives but they do not have to take them into account or reach an agreement. 

In case of collective redundancy the employer has a duty to consult with the appropriate representatives of the employees who may be affected by the planned dismissals or may be affected by measures taken in connection with those dismissals.  

collective redundancy situation arises when an employer plans to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less. The regulations apply on companies with more than 50 employees.

The duration of the consultation period depends on the number of workers being dismissed. The employer is required to commence the consultation process 'in good time'. Where the employer is proposing to dismiss 100 or more employees, consultation should commence at least 90 days before the first of the dismissals takes effect. If the employer is proposing to dismiss between 20 and 99 employees, the consultation should commence at least 30 days before the first of the dismissals takes effect. The minimum period of consultation can be extended, as long as redundancy notices have not been issued.

In cases of collective redundancies the employer must provide the appropriate representatives with the following: the reasons for the proposals; the numbers and descriptions of employees it is proposed to dismiss as redundant; the total number of employees of any such description employed by the employer at the establishment in question; the proposed method of selecting the employees who may be dismissed; the proposed method of carrying out the dismissals, taking account of any agreed procedure, including the period over which the dismissals are to take effect; the proposed method of calculating any redundancy payments, other than those required by statute, that the employer proposes to make.

Where standard information consultation provisions apply, the employer must provide information and consult with representatives on a range of issues. Employers are obliged to consult on recent and probable developments in the firm including its economic situation. Where there is a threat to employment, the employer is required to provide information and consult on the situation, structure and probable development of employment and on decisions likely to lead to substantial changes in work organisation or contractual terms and conditions of employment. Employers are required to ensure that the timing, method and content of consultation are 'appropriate'.

Additionally, the Transnational Information and Consultation of Employees Regulations 1999 (taken together with the Transnational Information and Consultation of Employees (Amendment) Regulations 2010) provide the basis for employees of large multinational companies based in the UK and with a presence elsewhere in Europe having a right to ask for a European Works Council (EWC) to be set up. An EWC is a body that represents employees of the multinational in the European Economic Area (EEA) in discussions with management on transnational issues. To avoid duplication, the remit of EWCs is limited to the discussion of 'transnational' issues only. The legislation applies to multinationals or company groups which have at least 1,000 employees in the EEA and at least 150 employees in at least two EAA member states.

Comments

Many collective agreements include provision for consultation for all redundancies, regardless of the likely number of impacted employees. Collective agreements are rarely enforceable in law – only if they are specifically incorporated into workers’ contracts of employment.

GMB v Man Truck and Bus UK Ltd (2000) clarifies that section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 is not restricted to cases where employees are to be made redundant. Employees that are to be terminated to be re-engaged under new conditions constitutes 'proposing to dismiss' employees as redundant within the meaning of section 188 and therefore they are required to comply with the consultation duties under that section.

Hardy v Tourism south east (2004) identifies that where an employer closes an establishment with the loss of more than 20 jobs the duty to consult under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 is triggered even if the employer expects to redeploy most staff depending on the change of contract. If an employer redeploys on terms that are so substantially different that they amount to the withdrawal of the whole contract of employment it will be proposing to terminate the existing contract.

National Union of Teachers v Acon County Council (1978) clarifies that an employer proposing to dismiss for redundancy has a duty to consult trade unions at the earliest opportunity. Consultation is too late if it begins after dismissal notice has been given.

Securicor omega express ltd v GMB (2004) clarifies that the information specified in section 188(4) must be provided to the employee representatives 'in good time' but not necessarily before the start of consultation. Whether it has been provided in good time should be considered as part of the wider question about whether there has been fair and adequate consultation in the particular case.

Middlesbrough Borough Council v TGWU (2001) clarifies that employers must consult on all three key areas in section 188 including ways of avoiding the dismissals, reducing the numbers to be dismissed and mitigating the consequences of the dismissals. This case identifies the three areas as separate mandatory duties.

Kelly and Anor v Hesley Group Ltd (2013) clarifies that when consulting with employee representatives the employer must go beyond offering an opportunity for consultation.  They must raise ways of avoiding, reducing the numbers of and mitigating the consequences of dismissals if those issues are not raised by employee representatives.

Bakers' union v Clarks of Hove Ltd (1978) clarifies that insolvency, in and of itself, does not constitute a 'special circumstance' for the purposes of exclusion from the duty to consult within section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992.

Cost covered by
Not applicable
Involved actors other than national government
  • Trade union
  • Works council
Thresholds
50
Sources
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