The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1999
In our very first issue we featured the challenge to the Conservative legislation on consultation on redundancies and transfers. The challenge was initially unsuccessful, but the case was taken to the Court of Appeal by the three unions involved - GMB, NASUWT and UNISON. The general election intervened and the unions agreed to put the appeal on hold pending proposed legislative changes to be introduced by the new Labour government.
The consultation paper on the Labour proposals was published in February 1998, but it was not until 7 July 1999 that new Regulations were published. There was no period for consultation on the new Regulations, despite changes from the proposals in the consultation document. The new Regulations came into force on 28 July 1999. They apply to dismissals or transfers taking place on or after 1 November 1999.
No Rights where fewer than 20 Redundancies
The significant change is the government's decision to retain the 20 redundancy threshold as the trigger for consultation. There is no threshold for consultation on transfers of undertaking.
Employers are only obliged to consult with unions or employee representatives where 20 or more employees are to be made redundant in the same establishment.
This is a significant blow. It retains the adverse change introduced by the Tories in 1995, which Labour strongly opposed. It goes back on the proposal in the consultation paper. It means that substantial numbers of workers remain deprived of any right to consultation through representatives in connection with redundancy dismissals.
The original challenge was on the basis that this change could not be introduced without an Act of Parliament, because of the wording of the European Communities Act 1972 and the Trade Union and Labour Relations (Consolidation) Act 1992, and that it discriminated against women, who are more likely than men to be employed by small employers with 20 or fewer staff.
The High Court rejected those arguments and the unions are considering whether to pursue these points to appeal.
Employee Representatives and Consultation
In this area, the news is better. The Government proposals go a long way to meet the points raised, although some concerns remain. The key elements of the changes to the law are as follows:
Choice of Reprtesentative
Where a trade union is recognised, the employer must consult with the union. It is only where there is no recognised union that the employer has a choice between representatives specifically elected for the purpose of consultation or those appointed or elected by the employees for other purposes, but with authority to represent.
Obligation on Employer
Where there is no recognised union the employer must invite employees to hold an election. If they do not do so within a reasonable time, the employer discharges his obligation by informing individual employees of the information required under the legislation.
Who elects the Representatives?
The representatives in redundancies are not now elected by those whom it is proposed to dismiss. They are to be elected by "any of the employees who may be affected by the proposed dismissals or may be affected by measures connected with those dismissals". This change to a broader category is welcome.
Conduct of the Election
Unlike the Tory law, the new Regulations contain requirements for the conduct of the election. There is no change on the timing ("long enough before the time when consultation is required"), but there are now specific provisions on fairness, representativeness, classes of employees, term of office, candidature, no unreasonable exclusion, entitlement to vote and voting in secret.
Burden of proof on Employer
This responds to a number of concerns raised. There are still gaps, for example there is no provision on voting free from interference or constraint. The most significant aspect is placing the legal burden on the employer, when challenged, to prove that the election complied with the statutory requirements.
Bringing Claims
Individual employees are now given a remedy where the employer's failure relates to the election of employee representatives. The burden is on the employer to show that the representatives were "appropriate" and that the requirements relating to the election have been complied with. This is a positive step.
Remedies
In a particularly welcome development, the maximum remedy for a failure to consult on 20 or more redundancies is changed to 90 days pay across the board, a significant increase where there are between 20 and 100 employees proposed as redundant. The maximum compensation for a failure to consult under TUPE is increased from 4 weeks' pay to 13 weeks' pay.
What Next?
The unions are considering whether to continue to appeal to the Court of Appeal. The Regulations do represent a step forward, but the retention of the 20 employee threshold for redundancy consultation is a major disappointment which continues to deprive many employees of the right to have their representative involved in consultation.