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Who do you consult with?

Posted on 30th May 2013
Case law

This article discusses a recent case about an employer's obligation to consult with employee representatives.

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Carly Murphy Carly
Murphy
Employment Law Solicitor Telephone: 01473 694401

On appeal the EAT held that the tribunal was wrong to conclude that the members of the JCC were appropriate representatives for the purposes of collective redundancy consultation.

Kelly v Hesley Group Limited [April 2013] UKEAT/0339/12

Background

An employer is obliged to consult collectively with “appropriate representatives” if it is proposing to dismiss as redundant 20 or more employees at one establishment within a 90 day period. The employer may consult with:

  • trade union representatives where a trade union is recognised;
  • employee representatives directly elected by the affected employees for the purpose of collective redundancy consultation, or
  • employee representatives who have been appointed or elected by the affected employees but for a reason other than collective redundancy consultation.
In the above case the EAT had to look at the third category above and consider whether or not the members of a joint consultative committee were appropriate representatives for the purposes of collective consultation.

Facts

Due to financial pressure the Hesley Group (‘HG’) wished to change the terms and conditions of a number of its employees. As part of that process it proposed dismissing as redundant 20 or more employees within a 90 day period. As a consequence, HG needed to collectively consult with appropriate representatives.

HG did not recognise a trade union yet it did have an existing joint consultative committee (‘JCC’).

The JCC was not set up for the purposes of collective redundancy consultation. It also had a clause within its constitution that made it clear that the JCC did not have a negotiating function. Additionally, HG had the right to co-opt people onto the committee “to ensure that everyone has their voice heard.”

Rather than going through an election process HG decided to consult with the JCC.

Following the completion of the process two employees brought claims against HG. One of the points argued by the two   employees   was   that   HG   had   not consulted with appropriate representatives.

The decision

The employment tribunal decided that the members of the JCC were appropriate representatives. The tribunal based its decision on the fact that there was nothing in the evidence to suggest that the JCC did not have the affected employees’ authority to be consulted for collective redundancy purposes.

On appeal the EAT held that the tribunal was wrong to conclude that the members of the JCC were appropriate representatives for the purposes of collective redundancy consultation.

The EAT found that the tribunal had not properly considered whether the members of the JCC had ‘authority’ from the affected employees to be consulted about the proposed dismissals. In particular, the tribunal had not taken into account the fact that the JCC did not have any negotiating powers and the fact that HG could co-opt members onto the JCC. In over looking these points the tribunal had reached the wrong decision.

In practice

When there is a need to collectively consult, employers may wish to consult with an existing employee forum or body. This can avoid the delay and inconvenience caused by holding an election to elect appropriate representatives. However, as this case makes clear, the employee body must have members who have ‘authority’ to collectively consult on behalf of the affected employees. There is no single determining factor but such things as the power to negotiate and how the members are appointed or elected will be taken into account.

It is for the employer to show that the employee representatives had the authority to represent the affected employees. It was accepted by the EAT in this case that a tribunal is not required to look into the election of each and every representative. However, there does need to be sufficient facts for a tribunal to make a decision on whether or not the employee representatives had the ‘authority’ of the affected employees.

It is well worth discussing the situation with us before you decide to consult with the members of an existing employee body. The cost of getting the consultation wrong may be a protective award of up to 90 days’ gross pay for each affected employee which could be an expensive mistake!

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