The COVID-19 pandemic and the lockdown that took effect in the UK in March presented employers and employees with a sad reality. Many businesses have failed, or may yet do so, and redundancy must be faced by probably hundreds of thousands of workers. There will be many cases of employers finding that roles within their organisations have simply become surplus to requirements, no matter the good intentions they may have had at the outset about keeping jobs safe.
Employers who have first exhausted any possibilities for finding alternative roles for employees will then need to look at how many members of their workforce they must lose. There are issues in the Trade Union and Labour Relations Consolidation Act 1992 (TULR(C)A), section 188(1) that must be negotiated if it is proposed that more than 20 employees at one establishment are to be affected. There will be collective consultation obligations and a requirement to notify the secretary of state. If fewer than 20 are affected steps must still be taken to ensure fairness.
Employers need to be clear-eyed where workforces are concerned at this time, especially where a personal sense of obligation is involved. Fine as it is to strive for the very smallest number of redundancies possible, if you are considering making fewer than 20 redundant you need to be absolutely sure that you won’t need to add to those numbers within 90 days. Doing so will necessitate collective consultation.
Owners of large businesses that are subdivided, and that may employ staff at several sites, might question what exactly is meant in the TULR(C)A when it refers to 20 or more employees at ‘one establishment’. Does, for example, a chain of retail outlets owned by one company but staffed individually count as one establishment, or multiple? In the case of Usdaw and another v WW Realisation 1 Ltd (in liquidation) and others [2015] IRLR 577 ECJ (generally known as the Woolworths case) the European Court of Justice (ECJ) was required to consider 4000 redundancies made by two retail groups. The groups had many retail stores throughout the UK, each employing fewer than 20 people, and an employment tribunal had already taken the view that each store was a separate establishment. The ECJ did not rule categorically on this, but it implied that the tribunal’s opinion was permissible.
Any business operating across multiple sites will be well-advised to look carefully into, and where necessary to take proper advice on, the matter of whether the ‘one establishment’ rule applies or does not. It is likely to be a factor in any legal dealings, so employers must be ready to justify their position. Importantly, there is case law existing for both sides of the argument, so no decision should be made without careful consideration of the circumstances of an individual business.
If it is necessary, the collective consultation process must be handled properly despite the challenges thrown up by the current pandemic. It may well be necessary, and preferable, to do this online, and some kind of representative group from the affected employees will be needed. This may be a pre-exisitng group, or one may need to be elected. The best advice that can be given to any employer in this situation is to plan very carefully and do not underestimate the time and effort that the correct process will necessitate. The current situation makes an already tricky situation considerably more of a challenge, but the law is unchanged and there is only one way to proceed correctly.
