Failure to consult

Section 188 of the Trade Union and Labour Relations (Consolidation) Act says that, if employers are proposing to make 20 or more employees redundant within 90 days, they have to consult the appropriate representatives of anyone who might be dismissed "in good time".

In Hardy v Tourism South East, the employment appeal tribunal (EAT) said that this obligation to consult applies even when the employer intends to offer alternative employment to most of the employees.

What were the basic facts?

In December 2003, Tourism South East (TSE) decided to restructure its business, and told its 26 staff in the Tunbridge Wells office that it was to be closed on 30 January.

The employer hoped that 14 of the affected staff would be redeployed, resulting in just 12 redundancies.

Those wanting redeployment, however, had to apply for the jobs, all of which had different job descriptions and would either be at the Eastleigh office 100 miles away, or at a new sub-office that had not yet been set up.

What did the parties argue?

Mrs Hardy complained that TSE had failed to comply with section 188 of the Act because more than 20 staff were losing their jobs. For its part, TSE said the legislation was not applicable because it was only proposing to make 12 employees redundant at the same establishment.

Mrs Hardy responded that the legislation would be fundamentally undermined if her employer was able to argue that there was no obligation to consult because it hoped to bring the number of redundancies below 20 through redeployment.

On the contrary, she said that the legislation specifically contemplates that redeployment will be one of the issues discussed in the course of the consultation (see box). The tribunal agreed with TSE. It said that, as the employer was proposing to dismiss less than 20 staff in its Tunbridge Wells office, the legislation did not apply.

What did the EAT decide?

The EAT disagreed with the employer's argument and decided in Mrs Hardy's favour. It said that the definition of "dismissal" in the case of Hogg v Dover College [1990] ICR 39 was central to its decision.

In this case, the court said that there was still a dismissal if the employer brought one contract of employment to an end and re-engaged the employee on another. It said that it follows, therefore, that if "...an employer only proposes to keep the employee in his employment on what is in reality a different contract of employment, he will be proposing to terminate the existing one."

The EAT said that it was clear in this case that everyone's contract would be terminated and employees would have to apply for available vacancies (with different job descriptions) which were at a different location. Therefore there was a dismissal for the purposes of section 188 (1) and the employer should have consulted.

The EAT decided that any other conclusion would undermine the legislation. One of the reasons for having collective consultation is so that both parties have a chance to discuss ways of avoiding dismissals and reducing the number of employees dismissed.
The question of an appropriate remedy was remitted back to the tribunal.