Important changes to collective consultation

02 Jul 2013

The Trade Union and Labour Relations (Consolidation) Act 1992 imposes a duty on employers to collectively consult with its employees when it contemplates dismissing 20 or more employees during a 90 day period at "one establishment".  This allowed employers to terminate 20 or more employees across different sites without invoking collective consultation. 

The Employment Appeals Tribunal has determined in the case of USDAW v Ethel Austin Limited (in administration) that the phrase "one establishment" does not properly reflect the European legislation's intention and should be deleted.

This has huge implications for employers: in the event that 20 or more dismissals are proposed across an entire employer, the collective consultation requirements will now be invoked.  A failure to properly follow collective consultation procedure, could lead to a punitive award of up to three months' gross salary for each affected employee.