It has long been the case that where an employer is considering making more than 20 people redundant within a 90 day period, or where there is a transfer of employment governed by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), there is an obligation on the employer to consult with recognised trade unions or the elected representatives of the employees affected. The remedy for a failure to comply with these provisions is a protective award of upto 90 days’ pay per employee in the case of collective redundancy, and 13 weeks’ pay for TUPE transfers.
This duty was extended by the Agency Workers Regulations 2010 which have required that in all transfers or collective redundancies since October 2011 the employees are to be told of the number of agency workers working temporarily for and under the supervision and direction of the employer, the parts of the undertaking in which they are working, and the type work which they are carrying out. In the first reported case on these new obligations, Unison v London Borough of Barnet and another (2012), an Employment Tribunal considered whether the London Borough of Barnet had provided sufficient information about agency workers in their consultations with trade unions concerning potential redundancies and TUPE transfers.
The facts of the case were these. On 26 October 2011, the London Borough of Barnet gave notice to Unison and other trade unions that they were proposing to make redundancies that placed 97 employees at risk. This was one of a series of redundancy and transfer exercises going on as part of their “One Barnet Programme”, which also included a transfer of a number of their housing staff to Barnet Homes, and an outsourcing contract to NSL Ltd. These were both TUPE transfers which occurred on 1 April and 1 May 2012, respectively.
Although the provisions relating to collective redundancy had been amended on 1 October 2011, neither the London Borough of Barnet nor Unison was aware of this. However Unison did raise an issue with a “lack of transparency” concerning agency workers in early November 2011. The London Borough of Barnet did provide some information about which teams within their structure utilised agency workers, but the information was incomplete, and a complete list of all the agency workers working for them was not given. Unison brought a claim to the Tribunal on the basis that the London Borough of Barnet had failed to provide all the information required.
The claim succeeded. The Tribunal made three awards: in relation to those people who had been made redundant, 60 days’ pay; In relation to the transfer to Barnet Homes, the award was 40 days’ pay; and in relation to the transfer to NSL Limited, the award was equivalent to 50 days’ pay. The Tribunal emphasised that the purpose of protective awards is to punish the employer for its failure to comply with its consultation obligations, not to compensate the employees for any loss suffered. The difference in the levels of the various compensatory awards appears to have been based primarily on how relatively important the agency worker information was in the various consultation processes. Because the information was, in the Tribunal’s opinion, less crucial in relation to a TUPE transfer than in a redundancy exercise, the award to the transferred employees was lower than the award to the redundant employees. The award in relation to the second transfer, to NSL Limited, appears to have been higher (50 days instead of 40 days) in part due to the fact that, by that point, the London Borough of Barnet had been made aware of their breach, and yet had still failed to remedy it.
As always with these types of cases, they are very fact specific, and the level of award is very much an assessment by the Tribunal of the scale of the employer’s default, based on the evidence it hears. However, the scale of the awards is a salutary warning to employers who are involved in collective redundancy or TUPE consultation exercises to ensure that they do comply with the agency worker requirements.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).