Legal Background

The EU Collective Redundancies Directive (No.98/59) (the Directive) requires communication between employers and employees in relation to collective redundancies. Under the Directive, a collective redundancy is triggered when a certain number of redundancies are proposed within a set period (here the "aggregation period"). The Directive allows member states to adopt one of two slightly different formulas, so the aggregation period can be either 30 or 90 days. The UK's collective redundancy law deriving from the Directive was implemented by the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) which adopts the 90 day formula.

Under section 188 of TULRCA, the duty to consult collectively arises when an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days. The minimum consultation period is 30 days for between 20 and 99 redundancies and 45 days for 100 or more redundancies. Failure to consult collectively can lead to protective awards of up to 90 days' gross pay in favour of each affected employee as well as potentially making any subsequent dismissals unfair.

The ECJ decision*

The decision of the ECJ in UQ v. Marclean Technologies SLU arose from a referral by a Spanish court. The employee (UQ) brought a claim for unfair dismissal under Spanish law. She argued that her redundancy was unfair because her employer had failed in its obligation to consult collectively.

UQ was dismissed on 31 May 2018. She argued that, between 31 May and 15 August 2018, a further 36 employees were dismissed and, as such, her dismissal formed part of a series of redundancies which, taken together, triggered the obligation to consult collectively. The Spanish court referred the question to the ECJ, seeking clarification on whether dismissals which took place after UQ’s dismissal could be taken into account for the purposes of collective consultation.

The ECJ held that the relevant aggregation period covers any 30 or 90 consecutive days which includes the date of the dismissal in question, whether those consecutive days are before, after or both before and after that dismissal. The ECJ rejected the alternative proposition whereby the relevant reference period would be the period specifically either before or after the dismissal in question.

The result of this is that, in any particular case, the actual aggregation period will be those 30 or 90 consecutive days which include (i) the dismissal in question and (ii) the highest number of other redundancy dismissals.

In the UK, this could be any 90 days within the period starting 90 days before the relevant dismissal and ending 90 days after it. You have to pick the 90 days in that 180-day period which has the most redundancies. It does not matter that later redundancies were not proposed at the date of the dismissal in question.

Impact on employers – practical problems

The ECJ decision is likely to cause significant practical problems. It would essentially mean that redundancies which did not trigger the collective consultation obligation when made, may retrospectively have required such consultation if further redundancies are made in the next 90 days. For example on 1 June, an employer makes 15 redundancies and has no proposals for any more so does not consult collectively. However, business doesn't improve and on 1 August it makes a further 10 redundancies. Under the Marclean decision, the employer would be in breach of s.188 because it did not consult collectively about the first group of 15 redundancies, even if it does consult about the second group of 10.

If the first redundancies are still in process, the employer may be able to start consultation though it may be argued this is a sham if the process was at all well advanced. It will not be able to do anything about this "breach" if the first redundancies have already happened as in the example above.

The impact of the decision on UK law may be limited by section 188(3) of TULRCA which states that, when determining the number of dismissals proposed, no account is taken of employees in respect of whose dismissal consultation has already begun. So, if the first group had been 20 redundancies and the employer started collective consultation, it would not need to consult collectively about a second group of 10.

However, section 188(3) doesn't help the employer in our first example as it would not have started collective consultation when making only 10 redundancies.

Time will tell what impact, if any, the ECJ decision will have on UK law given Brexit and the end of the transition period on 31 December.

Please note the judgment has not yet been published in English.