Yesterday the Court of Appeal handed down its judgment in another long running and important collective redundancy case in USA v. Nolan. This case is of particular interest as it concerns the point at
Yesterday the Court of Appeal handed down its judgment in another long running and important collective redundancy case in USA v. Nolan. This case is of particular interest as it concerns the point at which an employer is obliged to commence collective redundancy consultation. In particular, the case raises the question as to whether an employer is obliged to commence consultation prior to any underlying strategic business or operational decision being taken which will result inevitably in 20 or more redundancies (for example, the decision to close a workplace), or whether the obligation only arises after such a decision has been taken and therefore relates only to the consequences of that decision.
Mrs Nolan was dismissed following the closure of a US military base in Hampshire. Although the USA did carry out a collective redundancy consultation process with the civilian staff at the base, Mrs Nolan argued that the consultation period was less than the 90-day period required and also that there had been a failure to consult before, and about, taking the operational decision to close the base. Both the Employment Tribunal and the Employment Appeal Tribunal determined that the USA had failed adequately to consult with Mrs Nolan, however, given European case law in this area which raised serious questions as to the timing of such consultation and the compatibility of the previous approach taken by the UK courts, the Court of Appeal sought clarity on the correct interpretation of the European Collective Redundancies Directive ("Directive") and sought guidance from the ECJ.
The ECJ declined to give guidance on technical grounds as it considered that dismissals in consequence of the closure of a military base by a foreign sovereign state did not fall within the scope of the Directive. It was therefore left to the Court of Appeal to determine whether the USA was subject to the collective redundancy obligations under UK law. In its judgment yesterday, the Court of Appeal concluded that the USA was not exempt from the collective redundancy obligations under UK law. However, the issue as to whether or not it was right for the USA to consult after the decision was taken to close the base (which is of more general interest) will be determined at a later hearing.
Mrs Nolan was dismissed following the closure of a US military base in Hampshire. Although the USA did carry out a collective redundancy consultation process with the civilian staff at the base, Mrs Nolan argued that the consultation period was less than the 90-day period required and also that there had been a failure to consult before, and about, taking the operational decision to close the base. Both the Employment Tribunal and the Employment Appeal Tribunal determined that the USA had failed adequately to consult with Mrs Nolan, however, given European case law in this area which raised serious questions as to the timing of such consultation and the compatibility of the previous approach taken by the UK courts, the Court of Appeal sought clarity on the correct interpretation of the European Collective Redundancies Directive ("Directive") and sought guidance from the ECJ.
The ECJ declined to give guidance on technical grounds as it considered that dismissals in consequence of the closure of a military base by a foreign sovereign state did not fall within the scope of the Directive. It was therefore left to the Court of Appeal to determine whether the USA was subject to the collective redundancy obligations under UK law. In its judgment yesterday, the Court of Appeal concluded that the USA was not exempt from the collective redundancy obligations under UK law. However, the issue as to whether or not it was right for the USA to consult after the decision was taken to close the base (which is of more general interest) will be determined at a later hearing.