In another case, akavan Erityisalojen Keskusliitto AEK & ors v Fujitsu Siemens Computers Oy [2009], the European Court of Justice (ECJ) has given guidance on the meaning of ‘contemplating’ redundancies for the purposes of collective consultation. The ECJ held that the duty to consult is triggered once a strategic or commercial decision is taken that compels the employer to contemplate or plan for redundancies. There must therefore be an intention on the part of the employer to make redundancies. The case is interesting because it is believed to be the first time the ECJ has looked at the meaning of the word ‘contemplating’ in the Collective Redundancies Directive (the Directive), a phrase that has often been contrasted with ‘proposing’ in the Trade Union and Labour Relations (Consolidation) Act (TULRCA) 1992. Many commentators have argued that ‘proposing’ redundancies is at a later stage in the decision process and that TULRCA 1992 does not properly implement the Directive. This decision removes some of that uncertainty and in fact appears to have moved the trigger point for the obligation to consult in the Directive closer to that in TULRCA 1992. The ECJ also reached the following conclusions:
- In a corporate group, the obligation to consult is triggered where the strategic decision is taken by the parent company or a subsidiary employer. However, the obligation to consult is always on the subsidiary employer, which will be liable for any failure even if the parent company failed to properly or promptly inform the subsidiary of the decision. No obligation will arise, however, until the affected subsidiary has been identified.
- The obligation to start consulting is not subject to the employer possessing the information required to be given to employee representatives;
- The consultation must have concluded before a parent company (or indeed a subsidiary employer) makes the decision to terminate employment contracts.
The decision is a helpful reminder of when the obligation to consult on collective redundancies arises. A delay in starting the consultation could result in harsh penalties for the employer.
By Asa Waring, legal director and Daniel Myers, assistant solicitorMishcon de ReyaE-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it ; This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
Akavan Erityisalojen Keskusliitto AEK & ors (social policy) [2009] EUECJ C-44/08