Industrial Tribunals Northern Ireland Decisions

 


THE INDUSTRIAL TRIBUNALS

                                                                                      CASE REF: 585/06

CLAIMANT                  Communication Workers Union

RESPONDENT            1.  Trivirix International Limited (in administration)

                                             2.  Redundancy Payments Branch

                                                                                   

DECISION

The Tribunal finds that;-

1. the first respondent has failed to comply with its statutory duty of consultation under Article 216 of The Employment Rights (Northern Ireland) Order 1996, and
2. the claimant is entitled to a declaration to that effect, and
3. the redundant employees that the claimant represents are entitled to a protective award for a period of 90 days, and
4. .  the first respondent is ordered to pay remuneration for the protected period.

Constitution of the Tribunal

Chairman:  Mr B Greene (sitting alone)

Appearances:

The claimant was represented by Mr A Sands, of counsel, instructed by

J G O'Hare solicitors.

The first respondent was not in attendance nor represented.

The second respondent was represented by M K Dobbin of Redundancy Payments Branch.

Sources of Evidence

5. The Tribunal heard evidence from Nigel Cotgrove and Lillian Short for the claimant.  Neither respondent adduced evidence.  The Tribunal also had regard to the originating claim, the response and three bundles of documents of 99 pages.

The Claim and Defence

6. The claimant claims a declaration and protective award against the first respondent for its failure to consult with the claimant about redundancies of 20 or more employees.  The first respondent denies the claimant's claims.  The second respondent is joined to the proceedings as it would be responsible for any protective award made by the Tribunal.

The Tribunal is satisfied that the first respondent was aware of the instant hearing.

The Issues

7. .     This issues before the Tribunal were;-       

(1)    Whether the first respondent has discharged its statutory duty of consultation under Article 216 of The Employment Rights (Northern Ireland) Order 1996.

(2)      If the Tribunal finds well-founded the complaint that the first respondent has not complied with its statutory duty to consult under Article 216 of the Employment Rights (Northern Ireland) Order 1996, whether it should make a protective award in addition to a declaration under Article 217(2) of the Employment Rights (Northern Ireland) Order 1996.

Findings of Fact

8.       (1)     The claimant was a recognised trade union within the first respondent.

(2)      In 2003 the first respondent made a smaller number of  redundancies and complied with its statutory requirements in relation to consultation.

(3)    On 5 December 2005 the claimant submitted to the first respondent a written claim for a review of pay; an increase in annual leave by one day; and a reduction in working time.  The claimant met with the first respondent on 7 December 2005 to formally present the claim.   

           

            The first respondent stated that it needed time to consider its response taking into account financial performance and profitability.  The claimant was also informed that the response might be delayed due to the long-term absence of Joe Sheerin, the first respondent's site manager.  No mention was made of redundancies.        

(4)      By reason of rumours in the factory about the financial health of the first respondent, despite management's assurances to the contrary, Nigel Cotgrove, the claimant's assistant-secretary wrote, by e-mail, to David Williamson, the first respondent's HR manager on 3 February 2006.  In the e-mail he stated;-

"You said yesterday afternoon that you would call me back concerning job security issues.  So far you have not called me back.

Please ring me ASAP.  Rumours are rife of mounting debts, impending redundancies and closure and we need to talk as a matter of urgency…. "

No information was forthcoming from the first respondent in a number of discussions with David Williamson who professed ignorance of what was going on.

(5)    On 8 February 2006 Nigel Cotgrove wrote again to David Williamson.  In the letter he stated;-

"Further to our discussions over the last few days I understand that due to the actions of a major customer there may be a real threat to the future of the Belfast factory."

He then offered the claimant's assistance and continued;-

"In the event that there is a real danger of redundancies and/or factory closure we would want to work with TriVirix and use our extensive contacts….to see if any assistance can be given to the Company in order to ensure that any job losses are minimised."

He then asked if the claimant's offer could be passed on to senior management.

David Williamson advised Nigel Cotgrove that he had passed the letter on to senior management but the first respondent did not otherwise respond.

           

(6)    Around this time senior management from USA were around the factory, ostensibly to sort out the problems in the company.         

(7)     On 16 February Nigel Cotgrove sent an e-mail to Lori Wilkinson, the first respondent's newly appointed HR Director, who was in Belfast.  In the e-mail he reiterated the claimant's concerns about the future of the site and renewed the offer of assistance.  He then stated;-

"…if the company is contemplating redundancies, or selling the plant, then there is a legal obligation… to consult with a recognised trade union at the earliest possible opportunity.  …"

         No response was received.

(8)    On the 17 February 2006 Lori Wilkinson left a message on Nigel Cotgrove's voicemail to say that she could not access her e-mails. Nigel Cotgrove, on the same day, sent a copy of the e-mail to Paddy Turnbull the first respondent's Sales Director and asked him to pass it on to Lori Wilkinson.

(9)    By letter, of 18 February 2006, Nigel Cotgrove wrote to Lori Wilkinson.  In that letter he expressed the claimant's concerns that the first respondent was about to announce redundancies or close the factory.  Among other things in the letter he asked that the first respondent would initiate proper consultation with the claimant.

                       

         The first respondent made no response to this letter.

           

(10)  On 20 February 2006 senior officials of the claimant flew to Belfast from London.  They spoke to David Williamson who had no information to give to them.         

(11)     At 2.00pm on 20 February 2006 Lori Wilkinson came to the factory gate, where an impromptu union meeting was being held, and told those assembled there that the problem was no longer the first respondent's as it had sold the factory.

Around 3.00pm representatives from Deloitte & Touche LLP came

to the gates and invited the claimant to discuss the matter with

them as the first respondent had gone into administration that

morning.

(12)  Deloitte & Touche advised the claimant that 76 employees, a majority of the workforce, would be made redundant from 22 February 2006.  The remainder of the workforce (34 employees) was made redundant, most by the end of March 2006.  Three employees remained until June 2006 to help in the clearing up and closing down of the first respondent.

(13)  As appears from the letter from the Secretary of State for Northern Ireland of 12 July 2006 government did not become aware of the first respondent's difficulties until mid-January 2006, when Invest NI was informed.

(14)  It is clear from the Administrators Report and Proposals of 27 April 2006 that the first respondent was experiencing financial difficulties throughout 2004 and 2005 but apparently did not seek professional advice until 31 January 2006 when they sought professional advice from Deloitte & Touche LLP.

The Law

9.      (1)     An employer proposing to dismiss as redundant 20 or more employees, within a period of 90 days, must consult, at least 30 days before the first dismissal takes effect, with the representatives of a recognised trade union (Article 216 The Employment Rights (Northern Ireland) Order 1996).                  

(2)    Where there are special circumstances, that make it not reasonably practicable for the employer to comply with requirements of consultation, the employer shall take all steps towards compliance as are reasonably practicable in the circumstances (Article 216(9) The Employment Rights (Northern Ireland) Order 1996).

(3)    Where special circumstances apply, which rendered it not reasonably practicable for an employer to comply with the consultation requirements of Article 216, the onus is on the employer to show that there were such circumstances and that he complied, as far as was reasonably practicable, with the consultation requirements (Article 217(6) The Employment Rights (Northern Ireland) Order 1996).

(4)    Where an employer has failed to comply with a requirement of Article 216 and the Tribunal finds such a complaint well-founded the Tribunal shall make a declaration to that effect and may in addition make a protective award (Article 217(2) The Employment Rights (Northern Ireland) Order 1996).

(5)    Where a Tribunal decides to make a protective award, it shall be what the Tribunal considers to be just and equitable in all the circumstances, having regard to the seriousness of the employer's default in not complying with Article 216, but the period of the protective award shall not exceed 90 days (Article 217(3) and (4) The Employment Rights (Northern Ireland) Order 1996).

Application of the Law and Findings of Fact to the Issues

10.      (1)    The claimant is a recognised trade union.

(2)    The first respondent decided on 20 February 2006 to make 110 employees redundant beginning on 22 February 2006.

(3)    The first respondent was obliged to begin consultation with the claimant at least 30 days before the first dismissals on 22 February 2006.

(4)    The first respondent did not comply with its statutory obligations under Article 216(2), (4) and (6) of The Employment Rights (Northern Ireland) Order 1996.

(5)    Though the first respondent pleads special circumstances, under Article 216(9) of the 1996 Order, it has failed to show that there were special circumstances and that it tried to comply with its statutory obligation in relation to consultation as far as was reasonably practicable, as required by Article 217(6) of the 1996 Order.

           

(6)   The Tribunal finds well-founded the claimant's complaint that the first respondent failed to comply with its statutory requirements under Article 216 of The Employment Rights (Northern Ireland) Order 1996 and makes a declaration to that effect.

(7)    The Tribunal finds that the claimant is entitled to a protective award which applies to the employees it represented.  In so concluding the Tribunal took into account the following matters;-

(a)   The first respondent did not adduce any evidence to support its contention that there were special circumstances in relation to these dismissals by reason of redundancy.

(b)   The first respondent did not give notice of the redundancies until 20 February 2006, two days before the redundancies were to commence.

(c)    The first respondent was experiencing financial difficulties in 2004 and 2005 and failed at any time to discuss that with its employees or their representatives.

(d)   The first respondent ignored requests for information and offers of assistance from the claimant.

(e)   The first respondent throughout sought to give the impression to the employees that there was nothing to be concerned about.

(8)    A protective award is punitive in nature and designed to impose a sanction on an employer for his failure to observe his statutory duty to consult with his employees (see Harvey on Industrial Relations and Employment Law E [2633.02]).

(9)    The protective award is a collective award that is only for the benefit of those employees in respect of whom the first respondent has failed to consult (Article 217(3) of the 1996 Order).

(10)  The protected period begins on the 22 February 2006 (Article 217(4) of the 1996 Order).

(11)  The length of the protected period is what the Tribunal considers just and equitable (Article 217(4) of the 1996 Order.

The English Court of Appeal in GMB v Susie Radin Ltd [2004] IRLR at 400 per Peter Gibson LJ at para 45 stated that;-

"… a proper approach in a case where there has been no consultation is to start with the maximum period and reduce it only if there are mitigating circumstances justifying a reduction to an extent which the employment tribunal considers appropriate."

(12)  There are not any mitigating circumstances here and the Tribunal measures the period of the protective award at 90 days.

Chairman:

Date and place of hearing: 30 July 2007, Belfast

Date decision recorded and issued to parties: