![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |||||||||
United Kingdom Employment Appeal Tribunal |
||||||||||
PLEASE SUPPORT BAILII & FREE ACCESS TO LAW
To maintain its current level of service, BAILII urgently needs the support of its users.
Since you use the site, please consider making a donation to celebrate BAILII's 25 years of providing free access to law. No contribution is too small. If every visitor this month gives just £5, it will have a significant impact on BAILII's ability to continue providing this vital service.
Thank you for your support! | ||||||||||
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> UK Coal Mining Ltd v National Union of Mineworkers (Northumberland Area) & Anor [2007] UKEAT 0397_06_2709 (27 September 2007) URL: https://www.bailii.org/uk/cases/UKEAT/2007/0397_06_2709.html Cite as: [2007] UKEAT 397_6_2709, [2008] IRLR 4, [2007] UKEAT 0397_06_2709, [2008] ICR 163 |
[New search]
[Context]
[View without highlighting]
[Printable RTF version]
[Help]
At the Tribunal | |
Before
THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)
MS K BILGAN
MR M WORTHINGTON
![]() ![]() |
APPELLANT |
2) THE BRITISH ASSOCIATION OF COLLIERY MANAGEMENT |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
For the Appellant | MR DAVID READE (One of Her Majesty's Counsel) Instructed by: Messrs Freshfields Bruckhaus Deringer Solicitors 65 Fleet Street LONDON EC4Y 1HS |
For the First Respondent | MR SIMON DYER and MS SCHONA JOLLY (of Counsel) Instructed by: Messrs Browell Smith & Co Solicitors Pearl Assurance House 7 New Bridge Street West NEWCASTLE-upon-TYNE NE1 8AQ |
For the Second Respondent | MR SEAMUS SWEENEY (of Counsel) Instructed by: Messrs Watson Burton LLP 1 St James Gate NEWCASTLE-upon-TYNE NE99 1YQ. |
SUMMARY
Redundancy – Collective consultation and information / Protective award
The Employment Tribunal made maximum protective awards for failure to consult properly over mass redundancies at the Ellington Colliery in Northumberland. The employers contended that the Tribunal had erred in its approach, which caused it to minimise the extent and nature of the consultation which had occurred. In particular, they contended that it had erred in its approach to special circumstances, and in fixing the appropriate length of the protective award.
The two trade union respondents contended that the decision should be upheld on the facts, and in a cross appeal further submitted that the Tribunal was wrong to take the view –which they did in the light of binding authority- that there was no obligation to consult over the reason for the closure itself.
The EAT dismissed the appeal and upheld the cross appeal. Dictum of Glidewell LJ in R v
British
Coal
and Secretary of State for Trade and Industry ex parte Vardy [1993] ICR 720, 752 to the effect that there need be no consultation over closure held to be no longer good law in the light of changes to the statutory provisions.
THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)
The background
"The safety of our employees is paramount. Whilst we have contained the flow, the face is flooded andmining
adjacent reserves carries unacceptable levels of risk. We are left with no realistic option but to close the mine."
"The reasons as you are fully aware, for the proposed redundancies are namely: special circumstance as a result of our being forced to cease production at the colliery for safety reasons following the penetration of water on the coalface and the unacceptable risks associated with extracting limited nearby reserves."
The letter stated that there would be ongoing consultation. Whilst the letter itself did not give the proposed date of the first dismissals, a copy of the HR1 was enclosed and that gave a date of 12 February. The HR1 is the document which was sent to the DTI giving information about the proposed redundancies. This stated that the reason for the proposals was:
"special circumstances as a result of our being forced to cease production at Ellington Colliery for safety reasons following the penetration of water on the colliery coalface and the unacceptable risks associated with extracting limited nearby reserves."
"During this whole period, whenever the unions made requests or suggestions which Mr Betts had to refer to head office (other than relating to matters such as alternative employment or payment to employees), no more was ever heard of any of these requests or suggestions."
"Without being emotive the inrush of water that occurred could be termed as an Act of God, in the nature and capacity of the event."
He reiterated that the decision to close the mine was taken to ensure the safety of the men. In terms, he stated that it was closed on the grounds of safety and not economic viability. The Tribunal described this statement as "blatantly untrue". In short, the company had been claiming both in its written communication with the union and with the DTI that safety was the reason for terminating these contracts. At the same time, certain managers were recognising in discussions with the unions that economics was also playing a part.
The law
"Article 2
1. Where an employer is contemplating collective redundancies, he shall begin consultations with the workers' representatives in good time with a view to reaching an agreement.
2. These consultations shall, at least, cover ways and means of avoiding collective redundancies or reducing the number of workers affected, and of mitigating the consequences by recourse to accompanying social measures aimed, inter alia, at aid for redeploying or retraining workers made redundant.
Member States may provide that the workers' representatives may call on the services of experts in accordance with national legislation and/or practice.
3. To enable workers' representatives to make constructive proposals, the employers shall in good time during the course of the consultations –
(a) supply them with all relevant information and
(b) in any event notify them in writing of –
(i) the reasons for the projected redundancies;
(ii) the number and categories of workers to be made redundant;
(iii) the number and categories of workers normally employed;
(iv) the period over which the projected redundancies are to be effected;
(v
) the criteria proposed for the selection of the workers to be made redundant in so far as national legislation and/or practice confers the power therefor upon the employer;
(vi) the method for calculating any redundancy payments other than those arising out of national legislation and/or practice.
The employer shall forward to the competent public authority a copy of, at least, the elements of the written communication which are provided for in the first subparagraph, point (b), sub-points (i) to (v
)."
"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."
"36. The case in which the employer 'is contemplating' collective redundancies and has drawn up a 'project' to that end corresponds to a situation in which no decision has yet been taken. By contrast, the notification to a worker that his or her contract of employment has been terminated is the expression of a decision to sever the employment relationship, and the actual cessation of that relationship on the expiry of the period of notice is no more than the effect of that decision.
37. Thus, the terms used by the Community legislature indicate that the obligations to consult and to notify arise prior to any decision by the employer to terminate contracts of employment.
38. Finally, this interpretation is confirmed, in regard to the procedure for consultation of workers' representatives, by the purpose of the Directive, as set out in Article 2(2), which is to avoid terminations of contracts of employment or to reduce the number of such terminations. The achievement of that purpose would be jeopardised if the consultation of workers' representatives were to be subsequent to the employer's decision.
39. The answer to the first question must therefore be that Articles 2 to 4 of the Directive must be construed as meaning that the event constituting redundancy consists in the declaration by an employer of his intention to terminate the contract of employment".
"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."
"For the purposes of the 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."
"(6) If on a complaint under this section a question arises –
whether there were special circumstances which rendered it not reasonably practicable for the employer to comply with any requirement of section 188, or
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."
"….
(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 …."
The Tribunal's decision.
"…In the real world employers cannot announce closures, leading to several hundred redundancies, without giving at least some indication of the reason for the closure decision itself. In any event, if the employer chooses to give the information, it is important that the information should be true and should be given in good faith. The whole purpose of the consultation process would be subverted if employers could with impunity give false information in the formal section 188 letters."
"…We take a very serious view of this deliberate breach of its obligations by the respondent. It is difficult to see how there can be constructive and meaningful consultation with an employer if the information given by that employer, in a formal document provided for the purpose of the consultations, is deliberately falsified. Furthermore, the mutual trust which needs to exist between the employer and the unions, if there are to be successful consultations, is put at risk if the unions have cause to believe that they have been given false information."
"…there was not only a redundancy proposal but a firm and final decision to dismiss as redundant more than 100 employees as soon as permission to turn off the pumps could be obtained. Consultation on issues of principle was therefore never possible because there was never any interval between the announcement of the redundancy proposal and a decision to proceed with the redundancies as proposed."
"39 We conclude therefore that there was no consultation at all about the matters of principle, what Mr Dyer termed the macro matters. We also conclude that there was no consultation about any matter at all when the redundancy proposal was still at a formative stage.
40 We do note, however, that there were several meetings, particularly with Mr Stewart, about matters which were of great concern to individuals and particularly the opportunities for alternative employment and the calculation of redundancy and other payments. There were also other specific issues, such as the arrangements for the continued employment of the four apprentices. Mr Huitson, Miss Kaye, Mr Mitchell and Mr Strachan all worked tirelessly and conscientiously to deal with all these matters. We do not wish in any way to minimise their efforts, however, when we add two qualifications. The first is that the work which they did was from the corporate (although not the personal) point of view self-serving, because the respondent thereby avoided unfair dismissal claims by individuals. Secondly, much of the relevant consultation took place not in union meetings (indeed there were very few meetings attended by anyone from BACM) but at meetings with groups of employees or with individuals."
"43 We have not heard sufficient evidence to satisfy us that on an objective view it was not reasonably practicable for the respondent to continue consulting beyond 26 February. It seems to us that it would not be unfair to characterise the closure and redundancy proposals as proposals which appeared to have been made on the basis of "back of envelope" calculations. In addition those proposals assumed a worst case scenario. We saw no relevant documents and heard no convincing evidence to show that, for example, that there had been any cost benefit analysis of the possibility of pumping the face dry to salvage the shearer and other equipment. The figure which Mr Haslam quoted, of £1/2m per week, was the total cost of running the mine. The labour cost was only about half that amount. The figure also assumed that all the workforce would go – in fact there was a need to retain employees, in particular for the washery, for a period well beyond 26 February. The time estimates for pumping the face dry were pessimistic and do not appear to have been based on any informed expert advice.
44 More importantly, however, even if there were special circumstances which made full compliance with the requirements of the statute not reasonably practicable, the respondent did not take all such steps towards compliance as were reasonably practicable in the circumstances. It was reasonably practicable for the respondent to give the true reason for the redundancy proposals. It was also reasonably practicable for the respondent to consult between 26 January and 26 February. The special circumstances defence fails on that ground alone."
"46 This is a case of deliberate and very serious breaches of the statutory requirements. The respondent deliberately gave a false reason for the proposals, deliberately failed to consult whilst the proposals were at a formative stage and deliberately failed to consult at all on any matter which could have affected the timing of the first batch of compulsory redundancies. This is a bad case and the maximum protected period of 90 days must be appropriate unless there are mitigating circumstances.
47 We have considered whether the discussions which did take place after 26 January, about such matters as alternative employment and payments to employees, are sufficient mitigation to justify reducing the 90 day period. We have concluded that they are not. Their importance is outweighed by the deliberate act of the respondent in giving a false reason for the redundancies – a rare if not unique feature of this case and one which makes the case particularly serious. The guidance in the Susie Radin case expressly includes consideration of the deliberateness of the failure. That is a serious aggravating factor in this case and one which outweighs any mitigation.
48 We have considered carefully all the factors listed in the Susie Radin case. We can see no other mitigating circumstances.
49 In particular, it is immaterial in this context that the obligation to consult was a very limited one, because of the principle that there was no need to consult about the decision to close the mine. It is clear from the guidance in Susie Radin, which was itself a case of redundancies caused by a closure decision, that the purpose of the protective award is punitive not compensatory."
The grounds of appeal.
The extent of the failure to consult.
Special circumstances.
The fixing of a penal award.
The cross appeal
"In my judgment, this section does not require a consultation about the reason for the redundancy, including whether or not a plant should close. I agree with the passage in the current edition of Harvey on Industrial Relations and Employment Law at
para 1365, p.III/454:
"In substance, the Act places on employers an obligation to plan any redundancy programme well in advance, and to do so in conjunction with the unions where appropriate. Although it is mainly directed at larger scale redundancies, it should be emphasised that its provisions also apply where the employer proposes to make even one single employee redundant. However, according to the interpretation so far placed upon the Act by the English courts, the obligation is not so much to consult with the unions on whether there should be redundancies, but rather to consult on how to carry out any redundancy programme which management deems necessary."
"By Article 2(2) the scope of the consultations is in part defined. In my view the fact that consultations are to begin as soon as the employer contemplates redundancies and that they are to include ways and means of avoiding redundancies indicates that the Directive is to be interpreted as including consultation on ways of avoiding redundancies by not closing the particular establishment, if that is what the employer has in mind."
"(3) Subject-matter of consultation
We have earlier observed that the employer is not obliged to consult as to his reasons for proposing redundancies: ex parte Vardy. However, consultation must ('shall') include consultation about ways of avoiding dismissals: reducing the number of employees to be dismissed and mitigating the consequences of the dismissal, and shall be undertaken with a view to reaching agreement with the unions: s .188(2)."
"In the light of that analysis of the law, we turn to our conclusions on the facts of this case. We are satisfied that the Tribunal erred in law. The fundamental way in which they erred was the approach they took in paragraphs 23 and 25 of the decision, in which the tribunal concluded that because there had been no consultation in relation to the decision to close the branches, therefore, there could not be held to have been consultation at all. Judge Clark in his summary of the law, to which we have referred, and with which we agree, in Middlesbrough, expressly referred to the decision in Vardy (Rv
British
Coal
Corporation and Secretary of State for Trade and Industry ex party Vardy and others [1993] IRLR 104), a decision of the Divisional Court, given on behalf of the Court by Glidewell LJ. In that lengthy judgment at paragraph 116, Glidewell LJ, having referred to s.188, said this:
'In my judgment this section does not require a consultation about the reasons for the redundancy, including whether or not a plant should close.'"
Disposal.