United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR COLIN BOURNE (Of Counsel) Instructed by: Messrs Thompsons Solicitors St Nicholas Building St Nicholas Street Newcastle upon Tyne NE1 1TH
For the Respondent	MR JOHN BOWERS QC Instructed by: Messrs Eversheds LLP Solicitors Central Square South Orchard Street Newcastle upon Tyne NE1 3XX

SUMMARY

Employees failed to consult with company council rather than union – did not consult with union until later stage 3 weeks before employees had to indicate willingness to be relocated but 4½ months before possible dismissal. Tribunal held consultation, took place "in good time". Appeal dismissed.


 


HIS HONOUR JUDGE ANSELL

1. This is an appeal from a Decision of a Newcastle upon Tyne Employment Tribunal who following hearings in January and February 2005 in written reasons promulgated on 15 February unanimously decided that a complaint that the Respondent employers had failed to comply with the requirements of consultation under Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 has not well founded and was dismissed.
2. The appeal turns on the provisions of Section 188:

"188 Duty of employer to consult … representatives

(1) Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less , the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be [affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals.

(1A) The consultation begin in good time and in any event—

(a) where the employer is proposing to dismiss as redundant 100 or more employees as mentioned in subsection (1), at least 90 days, and

(b) otherwise, at least 30 days,

before the first of the dismissals, takes effect.

(1B) For the purposes of this section the appropriate representatives of any affected employees are -

(a) if the employees are of a description in respect of which an independent trade union is recognised by their employer, representatives of the trade union, or

(b) in any other case, whichever of the following employee representatives the employer chooses –

(i) employee representatives appointed or elected by the affected employees otherwise than for the purposes of this section, who (having regard to the purposes for and the method by which they were appointed or elected) have authority from those employees to receive information and to be consulted about the proposed dismissals on their behalf.;

(ii) employee representatives elected by the affected employees, for the purpose of this section, in an election satisfying the requirements of section 188A(1).

(2) The consultation shall include consultation about ways of –

(a) avoiding the dismissals,

(b) reducing the numbers of employees to be dismissed, and

mitigating the consequences of the dismissals,

and shall be undertaken by the employer with a view to reaching agreement with the appropriate representative.

    (3) In determining how many employees an employer is proposing to dismiss as redundant no account shall be taken of employees in respect of whose proposed dismissals consultation has already begun.

    (4) For the purposes of the consultation the employer shall disclose in writing to the appropriate trade union representatives—

 (a) the reasons for his proposals,

 (b) the numbers and descriptions of employees whom it is proposed to dismiss as redundant,

 (c) the total number of employees of any such description employed by the employer at the establishment in question,

 (d) the proposed method of selecting the employees who may be dismissed, …

(e) the proposed method of carrying out the dismissals, with due regard to any agreed procedure, including the period over which the dismissals are to take effect.and

(f) the proposed method of calculating the amount of any redundancy payments to be made (otherwise than in compliances with an obligation imposed by or by virtue of any enactment) to employees who may be dismissed.

    (5) That information shall be given to each of the appropriate representatives by being delivered to them, or sent by post to an address notified by them to the employer, or [in the case of representatives of a trade union sent by post to the union at the address of its head or main office.

(5A) The employer shall allow the appropriate representatives access to [the affected employees] and shall afford to those representatives such accommodation and other facilities as may be appropriate.


    (6) …

    (7) If in any case there are special circumstances which render it not reasonably practicable for the employer to comply with a requirement of subsection [(1A), (2) or (4),], the employer shall take all such steps towards compliance with that requirement as are reasonably practicable in those circumstances.

Where the decision leading to the proposed dismissals is that of a person controlling the employer (directly or indirectly), a failure on the part of that person to provide information to the employer shall not constitute special circumstances rendering it not reasonable practicable for the employer to comply with such a requirement.

(7A) Where -

(a) the employer has invited any of the affected employees to elect employee representatives, and

(b) the invitation was issued long enough before the time when the consultation is required by subsection (1A)(a) or (b) to begin to allow them to elect representatives by that time.


the employer shall be treated as complying with the requirements of this section in relation to those employees if he complies with those requirements as soon as is reasonably practicable after the election of the representatives.

(7B) If, after the employer has invited affected employees to elect representatives, the affected employees fail to do so within a reasonable time, he shall give to each affected employee the information set out in subsection (4).]


    (8) This section does not confer any rights on a trade union or an employee except as provided by sections 189 to 192 below."

The Appellant was the recognised trade union for the purposes of this section.

3. In particular the appeal turns on the phrase "shall begin in good time" in Sub-Section 1(A). The background facts are that the Respondents are a well known motor manufacturers based in Sunderland and in 2003 a plan was evolved that a number of employees some sixty-two in number in the purchasing services department were to be relocated from Sunderland to premises in Cranfield, Bedfordshire. The intention was to persuade all members of the relevant department to relocate and those employees who were to move here to be issued with new contracts of employment.
4. The Respondents operated a "company council" through which most matters concerning staff were discussed; the relevant agreement provided that amongst the matters to be discussed were negotiations on salaries and terms and conditions of employment. If necessary when negotiations were taking place in relation to annual pay rises or alterations in terms and conditions the negotiations would at some stage include a union divisional organiser so that he could ratify all agreements. The employee representatives on this council were ten representatives elected by secret ballot by the workers. As it happened two of the elected representatives were also union shop stewards although it appears there was no requirement for any of the representatives to be union officials. The plan regarding the relocation was that it was going to take place on 1 June 2004 and the employers informed the company council and the staff on 1 October 2003. The first meeting with the council took place on that date and the employers required the employees to indicate by the end of January 2004 whether they were prepared to move to Cranfield.
5. Much of the hearing before the Tribunal was taken up in relation to the issue as to whether or not the employers should have been consulting with the council or with the Appellant union. For some time the employers carried on consulting with the council and there were a number of meetings with them. Largely due to the efforts of the Claimant's regional officer Mr Mel Barras who sadly died before the proceedings were commenced, the employers were eventually persuaded that as far as consultation was concerned under Section 188 they had to involve the unions. That change of heart took several months to achieve and indeed only came about once the staff had balloted to take industrial action. From around 20 November the position of the employers was that they were indeed consulting with the union through the two union shop stewards that happened to be company council members; that was not sufficient for the union. Eventually by 10 December Miss Hill, a member the employers personnel department, wrote to Mr Barras confirming that the union were going to be formally involved in the discussions although there was still a further company council meeting on 17 December to discuss the proposed relocation. The union had also decided that they wanted to involve two particular shop stewards Messrs Sherriff and Cutting and for various reasons the union representatives did not meet formally with the employers until the company council meeting on 19 January 2004, although the Tribunal made a finding that by the beginning of January Mr Barras had been given "the last three months information on the purchasing situation" being some if not all the documentation in connection with the proposed relocation.
6. Once the unions were involved matters progressed speedily and we quote from the Tribunal's findings:

"3.45 On 19 January 2004 the company council met and for the first time Mr Barras, Mr Cutting and Mr Sheriff attended. Mr Barras, Mr Sheriff and Mr Cutting put forward a document headed 'Proposed Purchase Relotation'. The document indicates that it reflected the agreed position of AMICUS and the elected representatives of the council.

3.46 The company council met again on 21 January 2004 to consider the response of the respondent.

3.37 There was a further meeting of the company council on 28 January when the respondent tabled twelve improvements to their proposals. As a result of the discussions at that meeting, the respondent made two further improvements to their proposals."

The Tribunal makes no further mention of any further developments as far as negotiations were concerned and it appears to be the position accepted by both Counsel today that by the end of January the negotiations had reached a stage where the employees were able to make up their minds whether or not they are willing to accept the proposals. The Tribunal merely records that twenty-one members of the Sunderland department transferred to Cranfield on 1 June, twenty-three members were redeployed and seventeen members of the staff were made redundant.

7. As we have indicated already much of the Tribunal's time was taken up in coming into a view as to whether the consultations with the council satisfied the requirement of Section 188 for reasons that we need not go into detail. They came to the conclusions that those consultations between 1 October and 19 January did not and therefore the Tribunal had to consider the effect of the somewhat brief albeit effective consultations, that took place with the three union representatives in January. They dealt with that in paragraphs 5.7 and 5.8 of their Decision:

"5.7 The claimant argued that the respondent was in breach of subsection 1A because consultation had not begun in good time. It was suggested to us that GMB and AMICUS -v- Beloit Walmsley Ltd and Others was authority for the proposition that the obligation to consult the representatives of the union arose in October 2003 when the proposal to relocate the purchasing department was made and announced. On our reading of the case and the statute, the obligation arises where an employer is contemplating collective redundancies and that obligation arises where an employer is contemplating collective redundancies and that obligation is to begin in those consultations in good time with a view to reaching agreement. Section 1A provides that the consultation shall begin in good time and then provides minimum periods before the first of the dismissals takes effect. The relevant period is at lease thirty days before the first of the dismissals takes effect. Mr Barras and his colleagues attended meetings in January, which was four and a half months before the dismissals were to take effect. It was never suggested that the notices of dismissal of affected employees had been issued prior to Messrs Barras, Cutting and Sheriff jointing the company council meetings. We find that the consultation with Mr Barras and colleagues was in good time.

5.8 We also considered carefully whether the discussions with Mr Barras and his colleagues met the test for consultation set out in Securicor Omega Express Ltd -v- GMB. We are satisfied that the proposals were still at a formative stage. Mr Barras and colleagues had adequate information on which to respond and adequate time in which to respond. We are also satisfied that the respondent did conscientiously consider the responses. Moreover the consultation was effective. As a result of the professional input from Mr Barras, a set of realistic and proportionate responses was put forward and a significant number of improvements were achieved."

8. Before us today Mr Bourne has again renewed his submissions that the consultation had not begun in good time. He accepted that the reasonableness of the period must be judged working back from the date when the first of the dismissals was to take effect. Therefore, one has to work back in this case as the Tribunal did from 1 June 2004 and to ask itself the question: 'Has the consultation process begun in good time so that the aims set out in S.188(2) can be "achieved"?'. Thirty days in this case is the bare minimum, as it were the long stop, but it was agreed by both Counsel that one cannot adopt a mechanistic or calendar approach to these matters and one has to look at many factors to decide what was the appropriate time for consultations in the of this case to enable the three matters set out in sub paragraphs 2(a), (b) and (c) to be discussed namely the consultation about avoiding dismissals, reducing the number of employees to be dismissed and mitigating consequences of the dismissal. Clearly consultation had to commence before a final decision had been taken on those issues, otherwise consultation would be meaningless.
9. Mr Bourne submitted that since in this case the employers chose to start their discussions with the employees on 1 October and purported to start the consultation process by consulting with the council, the test of "good time" in this case has to be judged, certainly in part, by looking at the time that the employers thought was necessary to consult the employees namely from 1 October. He argued further that in this case a key factor was that the employers were seeking to obtain a response from the employees by 31 January 2004, moreover he argued that consultation could not be meaningful and effective unless it was taking place in tandem with the discussions which were taking place with employees otherwise there was the risk that the employees would be forced into decisions in relation to serious matters without having the benefit of advice from their union who had not yet been consulted.
10. The process of consultation was recently considered Securicor Omega Express Ltd v- GMB [2004] IRLR 9 where at paragraph 21, Mr Justice Burton - President set out the position thus:-:

"21 We turn then, against that factual background, to the submissions on this appeal in relation to the tribunal's decision. In the, as ever, clear judgment of Judge Clark, at the EAT, in Middlesbrough Borough Council v TGWU [2002] IRLR 332, a good deal of what has become important to us in the course of this hearing is clearly set out at paragraph 27, Judge Clark said as follows under the heading: 'Section 188 Consultation':

'A number of features merit attention in the context of this case:

(1) Consultation

An employer is not required, under s.188, to consult with the recognised unions about the reasons for the proposed redundancies, in the present case, financial reasons. (R v British Coal Board ex parte Vardy [1993] IRLR 104 and ex parte Price [1994] IRLR 72).

28. The topics for consultation include those specified in s.188(2). As to those, consultation must be genuine and meaningful. In the later judgment of the Divisional Court in ex parte Price [1994] IRLR 72, Glidewell LJ, said, paragraphs 24-25;

"It is axiomatic that the process of consultation is not one in which the consultor is obliged to adopt any or all of the views expressed by the person or body whom he is consulting. I would respectfully adopt the test proposed by Hodgson J in R v GwentCounty Council ex parte Bryant, reported, as far as I know, only at [1988] Crown Office Digest, p.19, when he said:

'Fair consultation means:

(a) consultation when the proposals are still at a formative stage;

(b) adequate information on which to respond;

(c) adequate time in which to respond;

(d) conscientious consideration by an authority of the response to consultation.'

Another way of putting the point more shortly is that fair consultation involves giving the body consulted a fair and proper opportunity to understand

fully the matters about which it is being consulted, and to express its views on those subjects, with the consultor thereafter considering those views properly and genuinely".'

And then in paragraphs 45 to 47 Judge Clark returns to the subject-matter of consultation and he said this:

'45. We have earlier observed that the employer is not obliged to consult as to his reasons for proposing redundancies: ex parte Vardy. However, consultation must ("shall") include consultation about ways of avoiding dismissals: reducing the number of employees to be dismissed and mitigating the consequences of the dismissal, and shall be undertaken with a view to reaching agreement with the unions: s.188(2).

46. We view those three features of consultation djsjunctively. Thus an employer may genuinely consult with the unions about ways of reducing the numbers of employees to be dismissed and mitigating the consequences of the dismissals, without genuinely consulting as to the principle of whether or not to declare redundancies at all. The fact that the employer, when embarking on consultation, who believes that his case for redundancies is unanswerable will not, as a matter of law, fail to discharge his statutory duty under s.188, Hough, passage cited earlier, so it does not follow, as a matter of fact, that such a belief precludes a finding that he has not engaged in genuine consultation for the purposes of s.118(2)(a).

47. The duties under the section are mandatory. It is not open to an employer, for this purpose, to argue, as would be open to him in defending a complaint of unfair dismissal by the individual employee, that consultationwould, in the circumstances, be futile or utterly useless: see Pol key v A E Dayton Services Ltd [1987] IRLR 503.'

22 That enshrines two principles.

1. That the consultation must in general be fair and meaningful and certainly must not be a sham.

2. That the consultation does not need to extend to the economic background or context in which the proposal for redundancy arises.

Mr Hogarth has drawn our attention to the recent decision of this tribunal presided over by Lindsay P, MSF v Refuge Assurance plc [2002] IRLR 324, ('MSF') in which it is emphasised that the duty of consultation does not arise until redundancies are proposed. But, of course, implicitly, it must arise before the precise redundancies are decided upon.

11. Mr Bowers in helpful submissions before us submitted that "good time" means no more and no less than time sufficient for fair consultation to take place working back from the final date which is the first date for dismissal. He submitted and we accept that one cannot adopt a too mechanistic or arithmetical approach to working out what is or is not good time. It will depend on many factors and is essentially a question for a Tribunal. A number of the matters involved will obviously be firstly the numbers of staff and indeed unions to be involved in the process; secondly what is a reasonable time for the union to be able to respond to the proposals and to make counter-suggestion regarding redundancies whilst the proposals are still at a formative stage. Timing will depend on the eventual outcome that is being envisaged how many are to be relocated or redeployed and the ancillary issues involved in association with that redeployment issues such as re housing expenses and if necessary new schooling for children involved. What are the subjects to be discussed within the consultation process? How many meetings are likely to be required to cover that process and as the process develops one have to consider what changes are taking place to the proposals and how those changes will affect the time for consultation and whether the time for consultation thereafter as a result needs to be extended. Whilst the Tribunal in this case started by the period of 4½ months working back from the date of dismissal, on closer analysis they did go into considerable detail in relation to the effectiveness of the consultation process once the unions had become involved and one sees from paragraph 5.8 that in five areas the Tribunal made findings in relation to the consultation with the union particularly in relation to the fact that the proposal was still at a formative stage when they became involved and that they were able to respond to adequate information and as a result of their responses a significant number of improvements were achieved.
12. Mr Bowers further agued that the Appellant's approach to Section 188 appeared to be based on the wording of the section prior to its amendment in October 1995. The previous subsection 2 required consultation to "begin at the earliest opportunity". The 1995 amendment followed a change in the Council Directives. The original Directive 75/129 set out in Article 2 that "where an employer is contemplating collective redundancies, he shall begin consultations with the workers representatives with a view to reaching an agreement. This changed in 1992 by virtue of Directive 92/56 to "he shall begin consultations … in good time with a view to reaching an agreement." That version appears in the current Directive 98/59. He argued that the amendment resulted from a policy to make a more liberal environment for employers. We accept his argument as to the correct approach to the subsection in the light of the 1995 amendment.
13. As regards the issue of 31 January Mr Bowers argued that the date was not the cut off date but merely the date on which an indication had to be given by the employees. Mr Bourne accepted that proposition. In any event the Tribunal's findings indicate that the effective consultation had been completed by 31 January. Although the process had started late is the day the union did not argue that they had insufficient time to make an impact on the discussions.
14. Mr Bowers submitted that the only danger in this case where the union became involved at a later stage than the employees would be if the employees could argue that as a result of the unions' late arrival on the scene fair consultation could not take place because essentially the proposals were cast in stone by December 2003. He submitted and we agree that the Tribunal's findings as set out above clearly indicate that indeed the die was not cast and that indeed the union officials in this case were able to play an important and effective role albeit over a shortened period of time.
15. We therefore can find no fault with the Tribunal's approach in this case. They asked themselves the important question which was not withstanding the fact that the union officials did not become involved until either the end of December or beginning of January was there still good and sufficient time for fair and meaningful consultation to take place before the effective date of dismissal or indeed as they found in this case before the date when the employees were expected to first respond to the employers. Their findings were clear and consistent that there was sufficient time to enable the process to take place and we can find no fault in that conclusion and accordingly this appeal is dismissed.