Collective Consultation Requirements and Redundancy: Can employers use the “special circumstances” defence for a failure to consult?
The collective consultation obligations apply where there are proposals for 20 or more redundancies at an establishment.
Section 188(7) of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”) provides a defence to a failure to collectively consult where there are "special circumstances which render it not reasonably practicable" for the employer to comply with the requirements.
This defence applies to failures to consult in good time, failures to consult on the required topics with a view to reaching agreement, or failures to provide the required statutory information on which consultation is based. There is no definition of “special circumstances”, but an impending insolvency situation on its own is not sufficient.
The case law also indicates that it is difficult to rely on this defence to justify a complete failure to consult except in the most extreme circumstances. Added to this with the recently introduced Job Retention Scheme with The Chancellor agreeing to pay up to 80% of wages (up to £2,500 per month) for employees who are unable to work due to the effects of Coronavirus it seems that it will make it difficult for employers to rely on the special circumstances defence to justify no or short collective consultation because it’s unlikely that they will otherwise go under if they take advantage of the government’s financial support.
It is therefore important that if employers decide to make collective redundancies, they should comply with the collective consultation requirements under TULRCA as best they reasonably practicably can. It is accepted with the lockdown and home working situation, it may be practically difficult to elect appropriate representatives if there aren’t any already, and to carry out face-to-face consultation with the representatives - but employers should still do what they can to inform and consult, taking into account their particular circumstances. The defence may work best if there is a procedural failing, so long as the employer takes what steps it can.
It should be remembered that the starting point if there is a breach is for each affected employee 90 days’ uncapped pay. This is a significant penalty and advice should be sought.
Posted on 04/02/2020 by Ortolan
