Consultation and Collective Redundancies/Stress at Work Revisited

In one of those cases that will be remembered for its name, Junk, long after the precise decision has been forgotten, the European Court of Justice has ruled that notice of dismissal for redundancy can only be given once the consultation process with workers' representatives has been concluded. The Collective Redundancies Directive is applied in UK law by the obligation to consult representatives of the workforce in good time, and at least 30 or 90 days before the first redundancy takes effect, depending on the numbers involved.

The difficulty comes in deciding when the consultation process is concluded, so that dismissal notices can be issued. The process of the employer giving the required information and then considering the response might take anything from a few weeks to much longer in a complex case. The ECJ in Junk states that the Directive 'imposes an obligation to negotiate'. What happens if the workforce or union representatives claim that there are still counter proposals to be evaluated and considered, and that therefore the consultation process is still continuing? If an employer issues notices prematurely, the dismissal would be in breach of the Directive.

In German law, where the Junk case originated, a dismissal effected in breach of the obligation to consult is null and void. UK law has always drawn back from such a drastic limitation on management's power to terminate the contract of employment. A dismissal in breach of the obligation to consult will be effective, though it might give rise to a claim for compensation. In practice, the remedy provided by British law is weak: a protective award of up to 90 days' pay per employee. Recent case law has emphasised that the 90 day period should be taken as a starting point, and only reduced if the employer can show good reason for either not consulting or cutting short the consultation process.

Practical implications

The ECJ's decision that the consultation process must be concluded before an employer issues dismissal notices is nothing new - if the purpose of the consultation process is to avoid dismissals and reduce the numbers affected, consultation cannot realistically take place on any meaningful basis if notices of dismissal have already been issued. Some commentators have suggested that the effect of the ECJ's ruling is to require employers to wait 30/90 days after the start of the consultation process before issuing dismissal notices. In our view, this is wrong - there...