Collective consultation landscape set for major shake-up despite Employment Rights Bill amendments

The government responded to various consultations on elements of the draft Employment Rights Bill this week introducing significant changes in a bid to balance the interests of employers, workers, and trade unions. It followed criticism of the originally tabled bill, with the amendments marking a significant shift in the UK’s approach to collective consultation.

Neil Black and Sue Gilchrist, employment law experts at Pinsent Masons, were commenting following amendments issued this week which include some news around collective consultation that “employers may take as a positive response on the government’s part”, said Black.

In response to the consultation on strengthening remedies against abuse of rules on collective redundancy and fire and rehire, the government has taken a step back from the initial proposal that GB-wide employers would always have to count redundancy numbers on a pan-GB basis. This compares to counting on a potentially site-based ‘establishment’ basis as is currently the case, where there is a proposal to dismiss more than 20 employees within any 90-day period.

That would have meant collective consultation on a continuous basis for many large employers - as ‘dismissal’ in this context has a wider reference pool than merely redundancies - as well as potentially putting union representatives under strain of incessant consultations.

“By reinstating the establishment test, so collective consultation will only be required where 20 or more redundancies are planned at one establishment, the government has recognised how onerous that would be. However, the government still seems set to fix additional requirements for collective consultation in cases where redundancies are happening across more than one site,” said Gilchrist.

The proposal is to set a figure, somewhere above the 20 which triggers collective consultation at one establishment, for the number of proposed redundancies which trigger the need for collective consultation across more than one site.  Therefore, if an employer proposes 40 redundancies across two establishments, it would require collective consultation across both establishments. However, further regulations are required for that.

Black said, “How an employer assesses the tests for establishment needs to be carefully thought through so employers understand when these current and additional obligations will be triggered. Furthermore, clarification would be welcomed on how employers are to consult meaningfully where the rationale for dismissals at different establishments may vary.”

The response also confirms that there will be no introduction of ‘interim relief’ in collective redundancy or ‘fire and rehire’ situations. Interim relief is an award which an employment tribunal can make at the outset of a claim, if a claimant can establish a real likelihood of success, and that can mean that the employer is obliged to pay them in full until the conclusion of the case. Regardless of the outcome, the interim relief is not repayable. The government was considering allowing interim relief claims to be brought where breaches of collective consultation were alleged in redundancy or dismissal and re-engagement scenarios.

However, there is also a significant increase to the maximum period of a protective award, rising from 90 to 180 days. The government views this as an “increased deterrent against cynical and deliberate breaches of the collective redundancy requirements”, particularly when coupled with a potential uplift in tribunal awards of up to 25% where the Statutory Code of Practice on Dismissal and Re-engagement is not complied with. That code will also be refreshed.

Gilchrist said: “One view might be to suggest that the interim relief proposal, although on the unions’ wish list, was never really going to fly, and that by removing that weight from employers the consultation response now seems more balanced. The 180-day protective award is a real potential burden on employers. However, employers can and do get collective consultation right, and it will focus the mind on that considerably.”