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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Shanahan Engineering Ltd v. UNITE [2010] UKEAT 0411_09_2202 (22 February 2010) URL: http://www.bailii.org/uk/cases/UKEAT/2010/0411_09_2202.html Cite as: [2010] UKEAT 411_9_2202, [2010] UKEAT 0411_09_2202 |
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At the Tribunal | |
On 22 February 2010 | |
Before
HIS HONOUR JUDGE RICHARDSON
MR T HARRIS
MRS J M MATTHIAS
APPELLANT | |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
For the Appellant | MR MICHAEL DUGGAN (of Counsel) Instructed by: Nabarro Nathanson Solicitors 1 South Quay Victoria Quays Sheffield West Yorkshire S2 5SY |
For the Respondent | MR MARK WHITCOMBE (of Counsel) Instructed by: Messrs Thompsons Solicitors Agincourt 14-18 Newport Road Cardiff Glamorgan CF24 0SW |
SUMMARY
REDUNDANCY
Collective Consultation and Information
Protective Award
HIS HONOUR JUDGE RICHARDSON
The Facts
"..instruct the Contractor to stop or not to start any work and .. later instruct him that he may re-start or start it"
"....you are hereby directed to reschedule your remaining works with immediate effect to complete the HSRG contract sequentially rather than in parallel. The schedule dates in your contract will be extended accordingly to allow for this change. We request that Shanahan Engineering review the resources on site and optimise those resources in line with the new schedule.
It is Alstom's expectation that this will result in an immediate reduction of both indirect and craft labour whilst maintaining compliance with the NAECI Agreement.
Please confirm that the required actions have been implemented by close of business on 1st May 2008"
The Legislation
"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 shall begin in good time and in any event-
(a) where the employer is proposing to dismiss 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.
(2) The consultation shall include consultation about ways of-
(a) avoiding the dismissals,
(b) reducing the numbers of employees to be dismissed, and
(c) mitigating the consequences of the dismissals,
and shall be undertaken by the employer with a view to reaching agreement with the appropriate representatives.
(4) For the purposes of consultation the employer shall disclose in writing to the appropriate 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 compliance with an obligation imposed by or by virtue of any enactment) to employees who may be dismissed."
"(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."
"(2) If the tribunal finds the complaint well-founded it shall make a declaration to that effect and may also make a protective award.
(3) A protective award is an award in respect of one or more descriptions of employees-
(a) who have been dismissed as redundant, or whom it is proposed to dismiss as redundant, and
(b) in respect of whose dismissal or proposed dismissal the employer has failed to comply with a requirement of section 188,
ordering the employer to pay remuneration for the protected period.
(4) The protected period-
(a) begins with the date on which the first of the dismissals to which the complaint relates takes effect, or the date of the award, whichever is the earlier, and
(b) is of such length as the tribunal determines to be just and equitable in all the circumstances having regard to the seriousness of the employer's default in complying with any requirement of section 188;
but shall not exceed 90 days…"
"(6) If on a complaint under this section a question arises-
(a) whether there were special circumstances which rendered it not reasonably practicable for the employer to comply with any requirement of section 188, or
(b) whether he took all such steps towards compliance with that requirement as were reasonably practicable in those circumstances,
it is for the employer to show that there were and that he did."
The Tribunal's Reasons
"11. If there are special circumstances which render it not reasonably practicable to comply it is for the employer to establish that to the tribunal. It seems to us, that depending on the precise nature of the special circumstances, they may relieve the employer of the obligation to consult altogether. They may relieve the employer of the obligation to consult in respect of any of the requirements but still leave him under the duty to consult in relation to others. S.188(6) says: "..not reasonably practicable for the employer to comply with any [our emphasis] requirement of s.188.." It does not necessarily absolve the employer from all responsibility to consult."
"12. There is no link to be drawn between the period of 30 days specified in s.188(1A), being the period before which consultation must normally commence, and the protected period or any loss which may have been sustained by any particular individual."
"24. We do not interpret the letter from Alstom as expressly instructing Shanahan to dismiss employees. Quite plainly, however, the respondent was faced with the situation whereby all of a sudden, they no longer required as many employees as they had previously working on the site. It would be unrealistic to expect them to continue to employ 50 or thereabouts employees for whom they had no work. There was plainly a redundancy situation.
25. Did the duty to consult arise? The fact that a sudden situation arises may or may not, depending on its circumstances, amount to special circumstances relieving the employer of the duty to consult, either entirely or in part. We are satisfied that the respondents were faced with this sudden situation. Why it may have been that Alstom chose to drop this bombshell quite as quickly and suddenly as it did is a matter upon which we can only speculate, since we have had no evidence from them, but we are satisfied that in those circumstances, it was sufficient to relieve the respondent from the obligation to consent to start consultation at least 30 days before the dismissals took effect."
"26. We are not satisfied, however, that it relieved the respondent in any other respect from the obligation to consult. Quite plainly the situation of 50 or so employees for whom there was no work is not something an employer could countenance for very long. We are not blind to the economic realities of life, but on the other hand we have no evidence before us that the respondent's financial position was such that it had to dispense with the services of these individuals quite as quickly as it did. We see no reason why it would not have been open to the respondents to have carried out some consultation with the appropriate representatives so as to comply with the other requirements of s.188. Although the ordinary requirement would be that the consultation should start at least 30 days beforehand, there is no requirement that it should last for 30 days. Consultation may be quite adequately completed within a matter of only a few days, depending on the circumstances and we see no reason why in this situation, this respondent could not have consulted with the Union representatives commencing on 1 May and continuing perhaps only for a very few days thereafter, taking account of the fact that there was Bank Holiday. In the event the respondent was accepting liability to pay a week's wages in lieu of notice. We have no evidence to suggest that would have placed them in any great difficulty if that period has been extended, perhaps by no more than 2 or 3 days, whilst consultation took place. There was an agreed selection procedure in place and we do not think that the consultation process would have taken very long… certainly no more than a few days.
27. We have come to the conclusion that this was a failure on the part of the respondents to comply with their obligations to consult in respect of consultation as required by s.188(2) and (4). We are satisfied that this was a serious failure. It had the impact of reducing the respondent's work force very substantially and we see no justification for failing to carry out such consultation as it was reasonably practicable, allowing for the fact that they were unable to commence at least 30 days before the first of the dismissals took place.
28. We declare that there was a failure to comply with the requirements of s.188 and make a protective award in respect of those individuals concerned for the protected period of 90 days. We see nothing in the evidence as put before us which would justify us in concluding that it should be any lesser period."
Submissions
Conclusions
"Whenever a question arises as to whether a particular step or action was reasonably practicable or feasible, the injection of the qualification of reasonableness requires the answer to be given against the background of the surrounding circumstances and the aim to be achieved."
"16.3 Redundancy Consultation
(a) Where a redundancy situation arises the employer shall commence consultation with the relevant signatory trades unions in line with statutory requirements, or as soon as reasonable practicable thereafter given the short-term changes in circumstances commonly experienced in engineering construction."
"45. I suggest that ETs, in deciding in the exercise of their discretion whether to make a protective award and for what period, should have the following matters in mind:
(1) The purpose of the award is to provide a sanction for breach by the employer of the obligations in s.188: it is not to compensate the employees for loss which they have suffered in consequence of the breach.
(2) The ET have a wide discretion to do what is just and equitable in all the circumstances, but the focus should be on the seriousness of the employer's default.
(3) The default may vary in seriousness from the technical to a complete failure to provide any of the required information and to consult.
(4) The deliberateness of the failure may be relevant, as may the availability to the employer of legal advice about his obligations under s.188.
(5) How the ET assesses the length of the protected period is a matter for the ET, but 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 ET consider appropriate."