No guidance from ECJ on collective redundancy

Posted: 7th November 2012

In United States of America v Nolan, the Court of Appeal sought guidance from the European Court of Justice (ECJ) as to the point at which the obligation to consult arises under Directive 98/59/EC, the Collective Redundancies Directive.

ECJDifficulties have arisen because the Directive provides that an employer should begin consultations when ‘contemplating’ making collective redundancies, whereas this duty is given effect in domestic law – under Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) – as being a duty to consult when an employer ‘proposes to dismiss’ employees as redundant.

The Court of Appeal decided to refer the following question to the ECJ:

‘Does the employer’s obligation to consult about collective redundancies, pursuant to Directive 98/59, arise (i) when the employer is proposing, but has not yet made, a strategic business or operational decision that will foreseeably or inevitably lead to collective redundancies; or (ii) only when that decision has actually been made and he is then proposing consequential redundancies?’.

However, the hoped-for clarification has not been forthcoming. Although TULRCA does not exclude workers employed by public administrative bodies or by establishments governed by public law, the Directive does expressly provide for them to be excluded from its scope. The ECJ held that the dismissal of staff at a military base was outside the scope of the Directive and declined to rule on the matter as it did not have jurisdiction to do so.