Redundancies and Business Transfers Regulations 1999

Amendments to the information and consultation requirements.

Early in 1998, the Government launched a consultation exercise on possible further amendments to the legislation governing consultation and information on collective redundancies and transfers of undertakings (see Race discrimination 1: direct discrimination ¹. The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1999² ("the 1999 Regulations") are the result of that process.

While these broadly reflect the approach in the proposals put out for consultation, they differ in certain material respects. Most crucially, the obligation to consult and provide information on collective redundancies under s.188 of the Trade Union and Labour Relations (Consolidation) Act 1992 ("the TULR(C)A") will continue to apply only where an employer "is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less".

Employees "affected by" redundancies or related measures

On the other hand, where such dismissals are proposed (within the extended meaning of redundancy established for these purposes by s.195(1) of the TULR(C)A), employers will now have to consult "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" (s.188(1) of the TULR(C)A as amended - our emphasis).

The reference to "affected" employees (which is further defined in a new s.196(3) of the TULR(C)A) is in line with the existing wording of reg. 10(1) of the Transfer of Undertakings (Protection of Employment) Regulations 1981 ("the transfer Regulations")³. By analogy with the established interpretation of that provision, "measures taken in connection" with proposed redundancy dismissals will include any "action, step or arrangement" made by the employer that may affect its employees (see Institution of Professional Civil Servants and others v Secretary of State for Defence⁴). While the employees most clearly affected are those whom it is proposed to dismiss, employers will now have to assess any possible consequential impact (direct or indirect) on the workforce that remains. This will include, for example, changes in working arrangements or terms and conditions of employment.

"Appropriate representatives"

The identification of "appropriate representatives" is modified in relation to both the redundancy and the transfers regimes. For the purposes of the redundancy provisions, a revised s.188(1B) of the TULR(C)A provides that the "appropriate representatives" of any affected employees are -

(a)if the employees are of a description in respect of which an independent trade union is recognised by their employer, representatives of the trade union; or

(b)in any other case, whichever of the following employee representatives the employer chooses:

(i)employee representatives appointed or elected by the affected employees otherwise than for the purposes of this section, who (having regard to the purposes for and the method by which they were appointed or elected) have authority from those employees to receive information and to be consulted about the proposed dismissals on their behalf;

(ii)employee representatives elected by the affected employees, for the purposes of this section, in an election satisfying the requirements of [the new] s.188A.

The definition of "appropriate representatives" under an amended reg. 10(2A) of the transfer Regulations (except in relation to references to the operative regulations) is in identical terms. Problematically, it therefore refers to existing employee representatives who have authority to receive information and to be consulted "about the proposed dismissals" on behalf of the affected employees (see reg. 10(2A)(b)(i)). With respect, this must be a drafting error. Dismissals are only one of a number of potential consequences of a prospective transfer, and do not (in contrast to the redundancy provisions) of themselves trigger the information and consultation requirements of reg. 10. It also conflicts with the broader terms of reg. 11A(b), which remains substantially unchanged.

Unions must be consulted

More generally, the amended provisions under both regimes now require employers to consult and/or inform an independent trade union where it is recognised for collective bargaining purposes in respect of any of the affected employees. It will be irrelevant whether those employees are union members, provided they belong to a class, grade or "description" of employees in respect of which the union is recognised.

Where no union is recognised in relation to any of the affected employees, and in relation to affected employees who are not covered by the scope of union recognition, the employer may choose whether to consult or inform existing employee representatives who have the appropriate authority, or employee representatives elected specifically for the purposes of consultation and receiving information.

Detailed election requirements

Where the employer chooses the latter option, the 1999 Regulations for the first time impose detailed statutory "requirements for the election of employee representatives" (see new s.188A(1) of the TULR(C)A and reg. 10A(1) of the transfer Regulations). These are that:

(a)the employer shall make such arrangements as are reasonably practical to ensure that the election is fair;

(b)the employer shall determine the number of representatives to be elected so that there are sufficient representatives to represent the interests of all the affected employees having regard to the number and classes of those employees;

(c)the employer shall determine whether the affected employees should be represented either by representatives of all the affected employees or by representatives of particular classes of those employees;

(d)before the election the employer shall determine the term of office as employee representatives so that it is of sufficient length to enable information to be given and consultations under [s.188 or reg. 10] to be completed;

(e)the candidates for election as employee representatives are affected employees on the date of the election;

(f)no affected employee is unreasonably excluded from standing for election;

(g)all affected employees on the date of the election are entitled to vote for employee representatives;

(h)the employees entitled to vote may vote for as many candidates as there are representatives to be elected to represent them or, if there are to be representatives for particular classes of employees, may vote for as many candidates as there are representatives to be elected to represent their particular class of employee; and

(i)the election is conducted so as to secure that -

(i)so far as is reasonably practicable, those voting do so in secret, and

(ii)the votes given at the election are accurately counted.

If one of the representatives elected in an election satisfying the above requirements ceases to act as such, and any of the affected employees are consequently no longer represented, those employees "shall elect another representative" in an election complying with paras. (a), (e), (f) and (i) (s.188A(2) of TULR(C)A and reg. 10A(2) of the transfer Regulations).

Obligation to inform individuals

It is now provided that "if, after the employer invites affected employees to elect representatives, they fail to do so within a reasonable time", it must "give to each affected employee" the information set out in s.188(4) of the TULR(C)A (in the case of proposed redundancies - see new s.188(7B)) or reg. 10(2) of the transfer Regulations (in a transfers case - see new reg. 10(8A)) (our emphasis). This provision attempts to fill the potential lacuna in the law created by the current provisions on invitations to elect (see s.188(7A) of the TULR(C)A and reg. 10(7A) of the transfer Regulations) that we identified in our Guidance Note on Consultation on redundancies and business transfers.

Complaints to tribunals

Statutory provisions on complaints to employment tribunals contained in s.189 of the TULR(C)A and reg. 11 of the transfer Regulations are amended to reflect the changes outlined thus far. Section 189(1) of the TULR(C)A, as substituted by the 1999 Regulations, now provides that where an employer has failed to comply with a requirement of s.188 or s.188A, a complaint may be presented to a tribunal on that ground -

(a)in the case of a failure relating to the election of employee representatives, by any of the affected employees or by any of the employees who have been dismissed as redundant;

(b)in the case of any other failure relating to employee representatives, by any of the employee representatives to whom the failure related;

(c)in the case of failure relating to representatives of a trade union, by the trade union, and

(d)in any other case, by any of the affected employees or by any of the employees who have been dismissed as redundant.

If a question arises on a complaint under this provision "as to whether or not any employee representative was an appropriate representative for the purposes of s.188, it shall be for the employer to show that the employee representative had the authority to represent the affected employees" (s.189(1A)). In addition, on a complaint under s.189(1)(a) relating to an election, it will be for the employer to show that the requirements of s.188A have been satisfied (s.189(1B)).

Regulation 11(2) of the transfer Regulations as amended mirrors the new s.189(1), save with references under paras. (a) and (d) being to "any of [the employer's] employees who are affected employees". Similarly, regs. 11(2A) and (2B) replicate the burdens of proof placed on employers by ss.189(1A) and (1B).

Awards and remedies

The maximum duration of the protected period under a protective award that may be ordered by a tribunal in respect of employees who have been dismissed, or whom it is proposed to dismiss, as redundant will now be 90 days in all cases (s.189(4) of the TULR(C)A as amended - provided, of course, that 20 or more redundancies are proposed in the first instance). Accordingly, the maximum 30-day period which has hitherto applied to 20-99 redundancies is abolished.

Reflecting this change, the maximum "appropriate compensation" that may be awarded under reg. 11(11) of the transfer Regulations is increased from four weeks' pay to 13 weeks' pay.

Victimisation protection extended

Previously, express protection against detrimental treatment or dismissal in the context of the redundancy and transfers consultation and information regimes (other than in respect of the protection afforded to those taking part in trade union activities) was limited to (existing or former) employee representatives and candidates for election as such representatives (see, respectively, ss.47(1) and 103(1) of the Employment Rights Act 1996 - "the ERA").

Protection is extended by the 1999 Regulations to those who "participated" in an election of employee representatives (see new s.47(1A) of the ERA), or who "took part" in such an election (see new s.103(2) of the ERA).

Time off for training

Finally, rights to paid time off for trade union duties for officials of independent recognised trade unions are expressly extended by the 1999 Regulations to cover duties concerned with "the receipt of information from the employer and consultation by the employer" under s.188 of the TULR(C)A or under the transfer Regulations (see new s.168(1)(c) of the TULR(C)A). This will include training in aspects of industrial relations relevant to the carrying out of those duties (see existing s.168(2)). In a similar vein, the right to paid time off for employee representatives or candidates for election is extended by an amended s.61(1) of the ERA to encompass time off "in order to undergo training to perform such functions".

Note: The 1999 Regulations came into force on 28 July 1999, with the modified provisions on the duty to consult appropriate representatives, the election of employee representatives, complaints to tribunals and awards and remedies applying (in redundancy cases) to dismissals "taking effect" on or after 1 November 1999 and (in transfers cases) transfers of undertakings "completed" on or after that date. Those provisions extending protection against detriment and dismissal and expanding the scope of the right to time off apply with immediate effect.

¹ Details of the consultation and information regimes, as previously amended by The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1995 (SI No.2587), can be found in our Guidance Note on Consultation on redundancies and business transfers.

² SI No.1925, available from the Stationery Office, price £2.

³ SI No.1794.

⁴ [1987] IRLR 373.