When an employer proposes to dismiss 20 employees or more within a 90 day period, the duty to enter into collective consultation under the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) may be triggered. In the test case of University College Union v University of Stirling , heard in the Court of Session (the Scottish equivalent of the Court of Appeal), the question arose as to whether employees whose employment came to an end because of the expiry of a fixed term contract counted towards the 20 or more employees.
Under TULRCA, in determining the question of whether the dismissal amounts to a redundancy dismissal, it is necessary to consider whether the dismissal is for “a reason not related to the individual concerned.” The Court of Session found that although the expiry of a fixed term contract did amount to a dismissal, it was for a reason related to the individual concerned, which is that the employees had agreed that their contracts would come to an end at a particular time or at the conclusion of a particular project. As such, they did not count towards the trigger point of 20 employees.
This decision is a positive outcome for employers. However, employers contemplating whether a collective consultation process is required will need to check carefully before excluding fixed term employees from the count of potential redundancies. The question an Employment Tribunal will ask is whether the reason for their dismissal “relates” to the individuals on fixed term contract or not. If not, then it is possible that the fixed term employees may count towards the trigger point of 20 employees, which could lead to potential liability for expensive protective awards.
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]).