Background:

The respondent operated as a chain of Department Stores throughout Northern Ireland, Great Britain and the Republic of Ireland.   Administrators were appointed in April 2020 and with effect from 14th August 2020 staff were made redundant, including the claimants.  The claimants are making a claim for a protective award as a result of the failure to collectively consult their representatives before dismissal.  The respondent argued that there had been a redundancy yet they were unable to collectively consult on the redundancy due to the insolvency of the respondent.  Additionally, it argued that it had taken such steps which were reasonably practicable to comply with the collective consultation requirement within Article 216 of the Employment Rights (NI) Order 1996.

In terms of the background, it was common case that no consultation took place and that there was no independent trade union recognised by the respondent.  Accordingly, there were no appointed or elected employee representatives.  No employees received payments for the redundancies or any unpaid wages.

Outcome:

The Tribunal found that there had been no collective consultation as required under Article 216.  It then had to determine whether there were special circumstances which rendered it not reasonably practicable to comply with the requirement.  Article 217(6) requires the employer to show that there were special circumstances.  To that end, they must be shown to be ‘unforeseen’ or ‘unexpected’.  The previous authorities have made it clear that a graduate financial decline towards insolvency was not something amounting to a special circumstance.  The Tribunal found that the financial difficulties of the respondent arose well before the Covid-19 pandemic and that they were not ‘exceptional’, ‘uncommon’ or ‘out of the ordinary’.  Furthermore, even if the financial circumstances were regarded as ‘special’ the respondent could have complied with its requirement under Article 216 on the basis that the financial circumstances, relating to administration, were ongoing from April 2020 yet the redundancies did not take place until August 2020.  This could have allowed for the consultations to be set up and conducted by way of video call if appropriate.  Accordingly, it was found that a protective period of 90 days would apply for the making of a protective award.

Practical Guidance for Employers:

This case provides some guidance on the application of ‘special circumstances’ meaning that collective consultation could not take place.   To this end, financial circumstances which have been going on for a while would not ordinarily fall into this category and there would still be the requirement to consult with the staff relating to redundancies.   This allows for a protective award to be sought by those affected by the redundancies.

NI Tribunal decisions are available on the OITFET website:
http://www.employmenttribunalsni.co.uk/